Question

Which of the following is true of the strategic trade theory? a. It advocates complete deregulation of international trade. b. It explains patterns of trade based on factor endowments. c. It provides direct policy advice. d. It is the first theory to account for dynamic changes in trade patterns.

Answer 1

Answer: c. It provides direct policy advice

Step-by-step explanation:

Strategic trade policy is a government policy whereby the excess profit that an oligopolistic international market generates will be shifted towards the firms that are in the home country.

The argument for strategic trade policy is that it help companies to take advantage of the economies of scale and also provides direct policy advice.