Statement I 'Trade Creation' and 'Trade Diversion' both have welfare implications.
Statement II Regional partners should be competitive and not complementary, for the purpose of the most efficient use of economic resources within a Customs Union.

A) Statement I is true, but Statement II is false B) Statement II is true, but Statement I is false C) Both statements are true D) Both statements are false

Answer & Solution

Correct Answer: Option C

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Statement I 'Trade Creation' and 'Trade Diversion' both have welfare implications...

Statement I 'Trade Creation' and 'Trade Diversion' both have welfare implications. Statement II Regional partners should be competitive and not complementary, for the purpose of the most efficient use of economic resources within a Customs Union.

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Statement I 'Trade Creation' and 'Trade Diversion' both have welfare implications.
Statement II Regional partners should be competitive and not complementary, for the purpose of the most efficient use of economic resources within a Customs Union.