Implementing a Regional Free-Trade Agreement May Have an Effect in Which

question 14

Multiple Choice

Implementing a regional free-trade agreement may have an effect in which, due to reduced tariffs, a nation begins to import a product from another member country that it had previously imported from outside the new trade region. This effect is called:

• A) trade creation.
• B) trade diversion.
• C) reciprocal trade agreements.
• D) the employment effect of FTAs.

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Definitions:

Retail Therapy

The act of shopping as a way to improve mood or relieve stress.

Indulging Oneself

Allowing oneself the pleasure of consuming or engaging in something enjoyable without restraint.

Defence Mechanism

A psychological strategy unconsciously used by individuals to protect themselves from anxiety or to cope with reality.

Fantasy

An imaginative or fanciful work, especially one that is very far removed from reality.