Customs Union Theory Reasons That the Formation of a Customs

question 116

Multiple Choice

Customs union theory reasons that the formation of a customs union will decrease members' real welfare when the:

• A) Trade diversion effect exceeds the trade creation effect
• B) Trade production effect exceeds the trade consumption effect
• C) Trade consumption effect exceeds the trade production effect
• D) Trade creation effect exceeds the trade diversion effect

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Definitions:

Proximate Cause

A legal concept that refers to the primary cause of an injury or damage, directly leading to the event without any intervening causes.

Possessor's Consent

Possessor's Consent refers to the approval given by someone in control of an asset or property for another party to use or access it.

Licensee

An individual or entity that has been granted the right to use, operate under, or engage in activities protected by another's intellectual property rights.

Trespassers

Individuals who enter or remain on a property without the permission or legal right to do so.