International trade in goods and services tends to ?
Correct answer: D. Increase the amount of competition facing home manufacturers
- A. Increase all domestic costs and prices
- B. Keep all domestic costs and prices at the same level
- C. Lessen the amount of competition facing home manufacturers
- D. Increase the amount of competition facing home manufacturers
Explanation
Imports give domestic consumers alternatives to home-produced goods, while exports expose domestic firms to foreign competitors. This generally increases competitive pressure on home manufacturers rather than reducing it.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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