题目内容
If the United Kingdom and Italy eliminate all tariffs on each other's goods and all restrictions to factor movements between them, and implement a uniform system of import restrictions against the rest of the world, these countries have formed a common market.
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Thehigheststageofeconomicintegrationisamonetaryunion.
Trade creation would occur if Canada and the United States form a free-trade area,and Canadians then import less steel from the United States while importing more steel from Japan.
Suppose that Mexico and Canada form a free-trade area. The Mexicans the decrease refrigertor manufacturing and increase imports of refrigerators from Canada, while the Canadians decrease auto manufacturing and import more autos from Mexico. This is an example of trade creation.
Trade creation and trade diversion refer to the short run (static) effects of economic integration while economies of scale, stimulus to investment, and effects on competition refer to the long run (dynamic) effects.
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