Some Studies Find That Trade in the Eurozone Has Risen

question 22

Multiple Choice

Some studies find that trade in the Eurozone has risen substantially, but compared with the control group of nations that stayed out, Baldwin finds the effect is:

• A) larger (25%) because prices have fallen and trade has increased by much more than the control group.
• B) just about the same because the control group is very similar to nations in the Eurozone.
• C) somewhat larger (9%) because there has been no measurable price decline within the union or evidence of trade diversion.
• D) much smaller (-2%) because trade within the union has been lackluster, whereas trade with the control group has increased dramatically.