Which of These Occurs If an Economy Is Opened to Trade

question 9

Multiple Choice

Which of these occurs if an economy is opened to trade?

• A) Free trade might increase the efficiency with which a country uses its resources.
• B) Economies of small-scale production would not be available as trade expands the size of the total market available to domestic firms.
• C) Free trade would decrease a country's stock of resources as increased supplies of labour and capital from abroad become available for use within the country.
• D) Domestic producers would be stimulated to look for new ways to increase their productivity.
• E) Prices for consumer goods may increase

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Definitions:

Shareholder

An individual or entity that owns one or more shares in a company's stock, giving them partial ownership and possibly voting rights within the company.

Shares

Units of ownership interest in a corporation or financial asset, giving holders a proportion of the company's profits and a vote in company matters.

Limited Liability

A legal structure that restricts the financial responsibility of an entity's owners to their investment, protecting personal assets from business debts.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.