When One Country "Dumps" Some of Its Products in Another

question 235

Multiple Choice

When one country "dumps" some of its products in another country, it

• A) increases the aggregate level of employment in the importing country, thereby depressing that nation's market wages.
• B) also exports new technology to the importing nation and thereby indirectly boosts the importing nation's real GDP.
• C) sells its products abroad at a price lower than the price in the home market or lower than the cost of production.
• D) also exports pollution-causing technologies and thereby creates environmental hazards in the receiving country.

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Definitions:

Normal Good

A type of good for which demand increases as the income of the consumer increases, showing a positive correlation between income and demand.

Cross-price Elasticity

A measure of how the demand for one product changes in response to a price change of another product, indicating substitutes or complements.

Cross-price Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good, indicating substitutability or complementarity.

Substitutes

Products or services that can be used in place of each other. Higher the similarity, the more easily consumers can switch between them, affecting demand.