Which of the following is a benefit of industrial development and foreign trade?
- (a)Increased competition
- (b)Reduced availability of goods
- (c)Decreased economic growth
- (d)Higher unemployment rates
Correct — A, Increased competition. Foreign trade connects domestic producers with the global market and exposes them to competition from foreign firms; industrial development widens the range of domestic producers competing with each other too. This increased competition is a genuine benefit — it pushes producers to improve quality and efficiency and lower prices, while widening consumer choice.
- (b)Reduced availability of goods — Trade and industrial growth generally increase the variety and availability of goods (domestic plus imported), not reduce it — this describes the opposite effect.
- (c)Decreased economic growth — Industrial development and trade openness are associated with rising output and growth, not a decline — this is the reverse of the actual effect.
- (d)Higher unemployment rates — Industrial expansion and trade typically generate new production and jobs on net; this option describes a cost sometimes feared from trade, not a benefit, and not the standard textbook effect.
Industrial development and foreign trade integrate domestic producers into a wider market. Exposure to competition — from other domestic firms and from imports — is one of the clearest benefits of this integration: it disciplines producers into cutting costs, improving quality, and offering better prices, which ultimately benefits consumers.
This is a 'select the beneficial effect' question — the three wrong options each describe an effect associated with restricting or shrinking trade/industry (scarcity, slower growth, job losses), which is the opposite of what industrialisation and open trade actually deliver.
- Industrial development and foreign trade widen the market and integrate domestic producers into it.
- Competition from other producers, including foreign firms, disciplines domestic industry into improving quality and efficiency.
- Trade generally increases the availability and variety of goods, not reduces it.
- This 'integration with the world economy' process is commonly termed globalisation.
Trade and industrial growth raise competition — a benefit, not a cost.
- Picking a negative-sounding option out of habit instead of reading what each option actually claims
- Assuming more trade means fewer goods available for domestic consumers — it is the reverse
MPPSC often phrases basic economic-concept questions as a single best-answer pick among cause-effect statements; UPSC prefers wrapping the same globalisation/liberalisation theme in a statement-based or assertion-reason format.
No directly related past PYQ was found.
- practice — not a real PYQ
Which of the following is most likely to result from increased foreign trade and industrial competition?
- (a)Improved quality and lower prices for consumers
- (b)Permanent shortage of goods
- (c)Reduced choice for consumers
- (d)Complete elimination of domestic industry
Answer(a) Improved quality and lower prices for consumers — competition disciplines producers to perform better.
- practice — not a real PYQ
The process of integrating a country's economy with the world economy through trade, investment, and technology flows is known as:
- (a)Liberalisation
- (b)Globalisation
- (c)Nationalisation
- (d)Protectionism
Answer(b) Globalisation — the process of integrating a country's economy with the world economy.