Trade Creation Tends to More Than Offset Trade Diversion for a Home

question 26

True/False

Trade creation tends to more than offset trade diversion for a home country forming a customs union with partner countries when: (1) the tariff rate in the home country is high prior to the formation of the customs union; (2) there are a large number of countries forming the customs union.

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Definitions:

Unpleasant Circumstances

Situations or conditions that are difficult, uncomfortable, or distressing to experience or endure.

Inter-team Group Technique

A method aimed at enhancing cooperation and efficiency among different teams within an organization by improving communication and resolving conflicts.

Consensus

A group decision that has the expressed support of most members.

Authority Rule

A system or principle governing conduct or activity, where decisions are made based on hierarchical position or statutory power.