When a Member of Custom Union,replaces One of Its High

question 11

Multiple Choice

When a member of custom union,replaces one of its high cost production processes with a production process that uses lower cost imports from a member nation,this leads to:

• A)trade creation
• B)trade diversion
• C)the generation of economies of scale
• D)dynamic trade effect

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Definitions:

Time Deposits

Banking term for deposit accounts that have a fixed term and typically offer higher interest rates than regular savings accounts.

M2

M2 refers to a measure of the money supply that includes cash, checking deposits, and easily convertible near money.

M3

A measure of the money supply that includes M2 plus large time deposits, institutional money market funds, and other large liquid assets.

Money Supply

The broad total of financial assets available in an economy at a specified moment.