Which of the following is a disadvantage of foreign trade?

A. it encourages dumping
B. it widens the world market
C. it encourages specialization
D. it provides varieties of goods

Correct Answer: Option A

A. it encourages dumping

Explanation

Excessive exports may cause quick depletion of natural resources of a country. Foreign trade may promote lopsided development if only those goods which have comparative cost advantage are produced in a country and lead to dumping of locally produced goods