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Explain the Concepts of Trade Creation and Trade Diversion

question 97

Essay

Explain the concepts of trade creation and trade diversion.Who are the winners and losers in each scenario?


Definitions:

Meritocratic System

A system in which advancement in society is based on an individual's capabilities and merits rather than on family, wealth, or social connections.

High Grade Point Average

High Grade Point Average (GPA) reflects strong academic performance and achievement, typically indicating that a student has attained A or A+ grades in their coursework.

Prestigious University

An institution of higher education well-known for its high academic standards, distinguished faculty, and notable alumni.

Davis-Moore Thesis

A sociological proposition that argues social stratification has beneficial consequences for the operation of a society, suggesting that the most talented individuals are rewarded with the most important jobs and highest income.

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