Which of the following is a benefit of industrial development and foreign trade?

Question

UnlockIAS · Accepted Answer

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.

Why the other options are wrong — (b) Trade and industrial growth generally increase the variety and availability of goods (domestic plus imported), not reduce it — this describes the opposite effect.  (c) Industrial development and trade openness are associated with rising output and growth, not a decline — this is the reverse of the actual effect.  (d) 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.

Concept: 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.

State PCS 2022 Q84 — Economy PYQ with Answer

State PCS 2022 Q84 — Economy PYQ with Answer