Gross domestic product-overall effects of trade diversion

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In a presentation about Serbia’s future entry into the European Union, the speaker indicates that the effects of trade creation will be equal to about 2% of Serbia’s gross domestic product and the overall effects of trade diversion will be equal to about 1% of Serbia’s GDP. The overall gain in national well-being for Serbia would be about 3% of its GDP. What do you think is the best explanation of how these numbers fit together? Is anything missing that you can fill in to make better sense of these numbers?

Reference no: EM131101399

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