ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to gain a high market share
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to lower the wages of the employees
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to improve the quality of the good
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to get rid of unwanted products for a cheap price
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Detailed explanation-1: -The objective of dumping is to increase market share in a foreign market by driving out competition and thereby create a monopoly situation where the exporter will be able to unilaterally dictate price and quality of the product.
Detailed explanation-2: -What is dumping? Dumping is when foreign firms dump products at artificially low prices in the European market. This could be because countries unfairly subsidise products or companies have overproduced and are now selling the products at reduced prices in other markets.
Detailed explanation-3: -Advantages of Dumping Consumers in the importer’s country can gain access to products at lower prices. Exporters receive subsidies from their government to sell at lower prices abroad. The exporter’s country can generate employment and become industry leaders.
Detailed explanation-4: -Dumping can push producers and manufacturers in the foreign (importing) country out of business, which can result in loss of jobs and higher unemployment.
Detailed explanation-5: -Dumping usually involves exporting large quantities or offloading a product on a foreign market. For example, if UK businesses started selling apples to the US for less than what they’re worth in the US, then US apple producers would have a hard time selling their products to the domestic market.