Members of the European Union find that "trade creation" is fostered when their economies are
A) highly competitive.
B) highly noncompetitive.
C) small in economic importance.
D) geographically distant.

Question

Quizplus · Accepted Answer

Highly competitive economies are able to produce goods and services efficiently and at a lower cost, which makes them more attractive for trade partners. This fosters trade creation, which refers to the increase in economic activity due to the elimination of trade barriers and the promotion of free trade. Non-competitive economies, on the other hand, may struggle to compete in the international market, which could limit their trade creation potential. Small economies may not have as much impact on international trade, and geographically distant economies may face logistical challenges that could hinder trade.

Members of the European Union Find That "Trade Creation" Is