Which of the Following Assumptions Is Common to Both New

question 11

Multiple Choice

Which of the following assumptions is common to both New Trade Theory and the model of intra-industry trade?

• A) trade is a zero-sum game
• B) production exhibits increasing returns to scale
• C) firms behave cooperatively rather than competitively
• D) exchange rates adjust to offset the effects of tariffs
• E) in the long run, exports equal imports

---

Definitions:

Random Assignment

A process in experimental design that randomly places participants into either a control group or an experimental group to reduce biases.

Operational Definitions

Specific explanations of abstract concepts that a researcher uses to measure those concepts empirically in their study.

Dependent Variable

In research, it is the variable that is tested and measured, expected to change as a result of manipulations to the independent variable.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together, showing the strength and direction of a relationship between variables.