- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 6. International Trade
- Subject 3. Trading Blocs, Common Markets, and Economic Unions
CFA Practice Question
When regional integration results in the replacement of higher-cost domestic production by lower-cost imports from other members, ______ occurs.
A. trade creation
B. trade liberalization
C. trade diversion
Explanation: Consumers will buy more due to the price drop.
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