Practise evaluating globalisation, comparing free trade areas, customs and monetary unions and using tariff diagrams to analyse trade creation, diversion and welfare.
What is not a threat to globalisation?
rising fear of losing jobs to immigrant workers
rising political tensions among major economies of the world
stronger trade unions in industries producing substitutes of imports
withdrawal of government support for inefficient industries
What is not a likely feature of a customs union?
common external tariffs with non-member nations
elimination of tariffs between member nations
elimination of quotas between member nations
shared common currency among member nations
The diagram shows the effect of trade creation if a tariff is removed.
Which areas show the total net gain to the domestic economy?
v, w, x and y
v, w and x only
w and x only
w and y only