Suppose Country X Currently Does Not Produce Widgets

question 97

Multiple Choice

Suppose country X currently does not produce widgets. Instead, it imports widgets from country Z. Then country X establishes a regional trade agreement with country Y. Following the formation of the regional trade agreement, it imports widgets from country Y. What has occurred?

• A) There is trade diversion and a welfare loss for country X.
• B) There is trade creation and a welfare loss for country Y.
• C) There is trade diversion and a welfare gain for country X.
• D) There is trade creation and a welfare gain for country Y.

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Definitions:

Effectiveness

The degree to which objectives are achieved and the extent to which targeted problems are solved.

Rational Persuasion

The use of logical arguments and factual evidence to convince someone of a viewpoint.

Emergent Leader

An individual who naturally takes on a leadership role within a group, often recognized through their actions or influence rather than formal appointment.

Demonstrated Competence

Evidence of an individual's or organization's ability to perform effectively based on past actions and achievements.