Exams › SSC CGL (Prelims) › General

Which of the following statements about output markets in an open economy is correct?

1. A country can only produce what it consumes
2. Consumers are restricted to domestically produced goods
3. Trade in goods and services allows wider consumer and producer choice
4. Only producers benefit from international trade

Correct answer: Trade in goods and services allows wider consumer and producer choice

Solution

In an open economy, trade in goods and services increases the variety available to consumers and expands opportunities for producers. The other options describe a closed economy or incorrect assumptions about trade.

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