Which of the followings are not effect of dumping on importing country ? (i) Domestic industry might be…
In international trade, dumping (selling goods abroad below domestic normal value) harms the importing country by depressing the sales and profits of domestic producers (i),…
Choose your answer
Which of the followings are not effect of dumping on importing country ?
(i) Domestic industry might be affected adversely by a decline in sales and profits.
(ii) If dumping is continued for a longer period, survival of the domestic industry may be threatened.
(iii) Dumping may create BOP problems for the country.
(iv) It finds market for its surplus production.
Answer and explanation
Correct answer D
In international trade, dumping (selling goods abroad below domestic normal value) harms the importing country by depressing the sales and profits of domestic producers (i), threatening the long-run survival of domestic industries through predatory pricing (ii), and worsening the importing nation's Balance of Payments via surge in imports (iii). By contrast, '(iv) It finds market for its surplus production' is a benefit to the *exporting* country, not an effect on the importing country; hence, 'Only (iv)' is correct.
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UGC NET Commerce