When a Country Allows Trade and Becomes an Exporter of a Good

question 128

Multiple Choice

When a country allows trade and becomes an exporter of a good:

• A)both domestic producers and domestic consumers are better off
• B)domestic producers are better off and domestic consumers are worse off
• C)domestic producers are worse off and domestic consumers are better off
• D)both domestic producers and domestic consumers are worse off

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Definitions:

Divestiture

The sale of assets, operations, divisions, and/or segments of a business to a third party.

Spin-off

A type of corporate reorganization in which a company creates a new independent company through the sale or distribution of new shares of its existing business.

Vertical Integration

An approach where a business grows by integrating various stages of its supply chain, including instances where a producer owns both its supplier and distributor.

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.