Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 35, Problem 5E
To determine
Difference between customs union and free trade area.
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A customs union is different from a free-trade area, in that: the world.
1.a free-tradearea removes trade barriers between memibercountries, whereas customs union adtopts idtentical tarifts with the rest of the world.
2..a free-tradearea allows for uniform tariffs, whereas aCustamis union does not.3. customs unionremoves trade barriers between membercountries, whereas a free-tracte areaadtopts idtentical tarifts with the rest of the world e. a free-trade area allows for free movement of factors, whereas a Customs union does not.
i will 5 upvotes
23. When one country joins a free trade area with a common external tariff, it causes:
O a. Trade agreement
Ob. Trade creation
Oc Trade diversion
O d. Trade union
For 2022, according to the heritage foundation, Russia's trade freedom score was 69.0 while Ukraine had a trade score of 76.8. Some of the reasons for these scores could be and we would expect as other countries respond to the war with trade sanctions to Russia, Russia's trade freedom score would
Because Russia has higher tariffs and more restrictions in trade than Ukraine; decrease
Because Ukraine has higher tariffs and more restrictions in trade than Russia; increase
O Because Russia has higher tariffs and more restrictions in trade than Ukraine; increase
Because Ukraine has higher tariffs and more restrictions in trade than Russia; decrease.
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- What is the general trend of trade barriers over recent decades: higher, lower, or about the same?arrow_forwardYou just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?arrow_forwardIf trade barriers hurt the average worker in an economy (due to lower wages), why does government create trade barriers?arrow_forward
- How are trade creation and diversion defined, and what roles do they play in the world gains and losses from a customs union?arrow_forwardUse the chart to answer the following question. Reduce the number of quotas Growth of trade Reduce protective tariffs Increased number of exports Variety of goods and services What is the BEST title for the chart? O A. Arguments for Protectionism B. Benefits of Free Trade O C. Disadvantages of Free Trade O D. Advantages to Trade Barriersarrow_forwardA territory within a country where companies benefit from duty-free policies by receiving imported goods for assembly and other processing, and subsequent re-export: O Maquiladoras O Free trade zone O Free trade agreement Regional economic blockarrow_forward
- Protectionist governments sometimes use tariffs to prevent imports. O True Falsearrow_forwardJust clarify "tariffs on a variety of American exports..." to identify who is imposing these tariffs, i.e., the US government or foreign governments?arrow_forwardWHAT HAPPENES TO A COUNTRY WITHOUT SCIENTIST AND RESEARCHERS? WHAT IS THE DISADVANTAGE OF NOT HAVING ENOUGH INDUSTRY IN A COUNTRY? WHAT WILL HAPPEN IF A COUNTRY DOESNT HAVE ENOUGH PRODUCTION BUT MORE EXPORTING THINGS IN OTHER COUNTRIESarrow_forward
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