Which of the following statements about a trade bloc is accurate?
A)The gains from a trade bloc are shared equally by each member.
B)Increased competition within a trade bloc can result in higher commodity prices in the domestic markets of the member countries.
C)A trade bloc may lower firms' costs by allowing them to exploit economies of scale.
D)A trade bloc can increase the opportunities for domestic business investments but usually repels foreign direct investments into the member countries.

Question

Quizplus · Accepted Answer

A trade bloc may lower firms' costs by allowing them to exploit economies of scale. This is because a trade bloc reduces trade barriers and promotes free trade among member countries. This, in turn, allows businesses to produce and sell goods at a lower cost, which improves their competitiveness in the global market. However, the gains from a trade bloc are not necessarily shared equally among members, increased competition may result in lower commodity prices, and a trade bloc may actually attract foreign direct investment.

Which of the Following Statements About a Trade Bloc Is