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Trade Diversion Reduces Worldwide Efficiency,because

Question 108

Multiple Choice

Trade diversion reduces worldwide efficiency,because:


A) production is diverted to the country with the comparative advantage.
B) production is diverted from the country with the comparative advantage.
C) unnecessary trade restrictions are created in the economies.
D) consumption is diverted to the country having inadequate demand.
E) the cost of transshipment of the goods increases thus raising their prices in the world market.

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