_____ Occurs When Lower-Cost External Suppliers Are Replaced by Higher-Cost

question 24

Multiple Choice

_____ occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.

• A)Trade creation
• B)Trade balancing
• C)Trade synergy
• D)Trade diversion

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Definitions:

Trade Restrictions

measures taken by governments to control or limit the trade of goods and services across their borders, such as tariffs and quotas.

Import Quota

A government-imposed limit on the quantity of a particular good that can be imported into a country.

Domestic Goods

Are products and services that are produced within a country's borders, as opposed to imported goods from other countries.

Federal Revenues

The income received by the federal government from taxes, fees, and other sources used to fund government operations and programs.