Which Trading Bloc Has the Goal to Reduce Tariffs by 75

question 5

Multiple Choice

Which trading bloc has the goal to reduce tariffs by 75 percent and achieve full economic integration?

• A) NAFTA
• B) ASEAN
• C) CAFTA-DR
• D) Mercosur
• E) APEC

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Definitions:

Perfect Complements

Goods that are consumed together in fixed proportions, such that the consumer regards them as inseparable in use.

Income Effect

The change in an individual's or economy's purchasing power generated by a change in income, affecting the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a shift in relative prices, leading consumers to substitute one product for another more affordable one.

Price Change

An adjustment in the cost of a good or service, which can be an increase or decrease from its previous amount.