Which statement about globalization and markets is true?

Which statement about globalization and markets is true?

• A. Globalization can expand supply chains, increase competition, and potentially lower prices.
• B. Globalization reduces prices in all markets.
• C. Globalization eliminates all trade barriers.
• D. Globalization makes all goods more expensive.

Answer: (C)

Globalization connects economies, allowing firms to source inputs from around the world and sell to customers in many markets. This tends to widen supply chains and increase competition among producers. With more competition and access to cheaper inputs, firms can lower costs and may pass some of those savings to consumers, leading to lower prices in many cases. However, price changes are not uniform: tariffs, quotas, currency fluctuations, and other barriers can keep costs high in some contexts, and trade barriers still exist in many places. So the true idea is that globalization often expands supply chains and competition and can lower prices, though there are limits and exceptions.

Globalization connects economies, allowing firms to source inputs from around the world and sell to customers in many markets. This tends to widen supply chains and increase competition among producers. With more competition and access to cheaper inputs, firms can lower costs and may pass some of those savings to consumers, leading to lower prices in many cases. However, price changes are not uniform: tariffs, quotas, currency fluctuations, and other barriers can keep costs high in some contexts, and trade barriers still exist in many places. So the true idea is that globalization often expands supply chains and competition and can lower prices, though there are limits and exceptions.