Which of the Following Is NOT an Effect of Intra-Industry

question 34

Multiple Choice

Which of the following is NOT an effect of intra-industry trade, if the concerned industry is monopolistically competitive?

• A)There are considerable national gains that arise from trade because there is an increase in the number of varieties of products available in the country.
• B)Domestic consumers gain because such trade results in lower prices of domestic varieties of the good.
• C)Total output of the domestic firms in the industry increases as a result of such trade.
• D)There are few shifts in production between industries that put pressures on factor prices.

---

Definitions:

Peacetime Deficit

A government budget deficit that occurs during periods without active warfare, indicating expenditures exceed revenues.

Federal Budget

An estimate of government revenue and expenditure for a specific fiscal year.

Discretionary Fiscal Policy

Government policy actions, such as changes in taxation or spending, intentionally made to influence economic activity.

Falling Output

A situation where the quantity of goods or services produced by an economy decreases over time.