If a Customs Union Includes the Lowest­cost World Producer of a

question 95

Multiple Choice

If a customs union includes the lowest­cost world producer of a
Product, then member countries:

• A)will always be better off in trade with that product.
• B)will always be worse off in trade with that product.
• C)can be better off or worse off depending on the strengths of the trade diversion and trade creation effects for that product.
• D)will no longer export or import that product.

---

Definitions:

British Pound

The currency of the United Kingdom, also known as GBP (Great Britain Pound).

U.S. Currency

The legal tender issued by the United States Federal Reserve, including banknotes and coins in circulation.

Australian Dollars

The official currency of Australia, commonly used within its borders and in standard foreign exchange transactions.

U.S. Currency

The legal tender issued by the United States government, which includes banknotes and coins.