Related to the Economics in Practice on p. 663: When a country opens its markets to free trade, competition ________ and efficiency ________.
A) grows; improves
B) grows; declines
C) decreases; improves
D) decreases; declines

Question

Quizplus · Accepted Answer

When a country opens its markets to free trade, domestic firms face competition from foreign firms. This increased competition leads to a more efficient allocation of resources as domestic firms strive to improve their productivity and quality to remain competitive. Therefore, competition grows and efficiency improves.

Related to the Economics in Practice on P