Which of the following occurs when lower-cost external suppliers are replaced by higher-cost suppliers within a free trade area?
A)Trade creation
B)Strategic pricing
C)Synergy
D)Trade diversion
E)Protectionism

Question

Quizplus · Accepted Answer

Trade diversion occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area. A regional free trade agreement will benefit the world only if the amount of trade it creates exceeds the amount it diverts.

Which of the Following Occurs When Lower-Cost External Suppliers Are