Paper 3 · International Trade
Dumping, which free trade leaves a country exposed to, occurs when
Atraders bring goods across a national border without declaring them to the customs authorities
Ba country exports more goods in a year than it imports from abroad
Ca government pays its own exporters a bonus on every unit they sell
Dforeign firms sell in a market below cost in order to drive out local producers
Explanation: Selling below cost is a loss the exporter can bear for a while but a local producer usually cannot. Once local production has collapsed the dumper is left with the market and raises prices again, so the low price the consumer enjoyed at first does not last.
Derived from ZIMSEC Economics 4050/3 Paper 3, June 2023, Q3