Choose the given statement is true/false:

Foreign trade decreases earnings of the citizens.

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True

False

answer is B.

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Detailed Solution

The above statement is false.
It has been noticed that countries open to international trade tend to grow faster. Those countries also provide better incomes and opportunities for their citizens. When MNCs enter a country, it increases foreign investment, which is crucial for the economy. It also increases competition in the market. As a result, local firms produce better quality products to compete with the new company. Overall, there is increased income as well as production. The increased production will also increase the national income of a country. India also noticed that when trade barriers were removed, there was impressive economic growth.
The correct statement would be, Foreign trade increases earnings of the citizens.

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