A Customs Union Will Increase the Welfare of Its Members

question 56

Multiple Choice

A customs union will increase the welfare of its members and the
Rest of the world if:

• A)trade creation is greater than trade diversion.
• B)trade creation is less than trade diversion.
• C)trade creation is positive.
• D)trade diversion is positive.

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Definitions:

Profit Margin Factor

A measure of a company's earnings (or profits) relative to its revenue, showing the percentage of each dollar of sales that results in profit.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of multiple investments.

Income From Operations

The earnings generated from a company's regular core business operations, excluding deductions of interest and taxes.

Residual Income

A measure of net income after accounting for the cost of capital.