According to Richard Baldwin, studies indicating massive increases in trade resulting from currency unions are:
A) biased because of use of data from rich countries.
B) generally applicable to the euro.
C) underestimating the impact of the euro on intra-European Union trade.
D) not the result of lowering the transaction costs for trade within the euro area.
Ans: D) not the result of lowering the transaction costs for trade within the euro area.
You might also like to view...
If a large change in the variable measured on the x-axis is associated with a small change of the variable measured on the y-axis, the line is ________ and the slope is ________
A) downward-sloping; large B) downward-sloping; small C) upward-sloping; small D) either downward or upward-sloping; small
If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should
A) engage in free trade. B) protect the capital-intensive product. C) protect the land-intensive product. D) protect the labor-intensive product. E) discontinue all international trade.