Economists argue that increased international trade and cross-border investments will result in __________ prices for goods and services.
A) higher
B) stable
C) lower
D) unstable
E) variable

Question

Quizplus · Accepted Answer

Increased international trade and cross-border investments lead to increased competition, which in turn leads to lower prices for goods and services. This is because of the greater efficiency and productivity gains that come from specialization and economies of scale as countries specialize in the production of goods and services that they are relatively better at. As more countries participate in international trade, the supply of goods and services increases, which puts downward pressure on prices.

Economists Argue That Increased International Trade and Cross-Border Investments Will