When the United States, Canada, and Mexico from a free trade area, and Mexico beings importing a product from Canada rather than from the lowest cost world producer.
A. Trade diversion occurs
B. Trade creation occurs
C. World welfare rises
D. World welfare falls to zero
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When the formation of a free trade area results in the reduction of trade with nonmember nations in favor of member countries,____ occurs.
A. Trade devaluation
B. Trade revaluation
C. Trade creation
D. Trade diversion
Which country is not a member of the European Union?
A. Spain
B. Germany
C. France
D. Iceland
The implementation of the European Union has:
A. Made it harder for Americans to compete against the Germans in the British market
B. Made it easier for Americans to compete against the Germans in the British market
C. Made it harder for Americans to compete against the Japanese in the British market
D. Made it easire for Americans to compete against the Japanese in the British market
The common agricultural policy of the European Union has:
A. Increased American farm exports to the EU
B. Decreased American farm exports to the EU
C. Lowered the price of American farm exports to the EU
D. Not affected the price of American farm exports to the EU
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