When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists?

Academy of PakistanTest & Learning

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Academy of PakistanTest & Learning

804Active Users

92EconomicsMedium

Atrade creation

Btrade diversion

Ccomprehensive welfare effects

Ddynamic welfare effects

Correct answer

B. trade diversion

Explanation

The correct answer is trade diversion.

When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists? - Answer and Explanation | Academy of Pakistan