Question

Which of the following NOT a result of trade creation?

- Buyers can acquire goods and services at lower cost.

- Imported goods are available at higher prices

- Consumers are faced with a wider selection of goods

- Lower costs tend to lead to higher demand for goods

Answer 1

Since trade means the export and import of goods.

Trade creation make available variety of goods for consumption and increases the choice facility.

Since those good are imported whose price is either high in the domestic economy or the variety is not available. So imported goods will be available at lower prices otherwise the import will be less.

so buyer can purchase goods and services at lower cost (price).

Lower cost leads to more demand for the imported goods.

Hence it can be said that "Imported goods are available at higher prices" this statement is not correct regarding the trade creation.

Hence second is the correct answer.