Final answer:
The most common mode for companies to begin international expansion is exporting, due to its lower risks and requirements. International trade helps small economies by allowing them to achieve economies of scale and benefit from increased competition and a greater variety of goods.
Step-by-step explanation:
The mode that companies tend to use in their first attempt to expand internationally is A. Exporting. Exporting is the process of selling goods or services produced in one country to another country. This mode is preferred by many companies as it involves less risk and investment compared to other forms of international expansion such as licensing, franchising, or joint ventures. Exporting allows a company to enter foreign markets with fewer financial resources and less need for local market expertise.
Regarding international trade, it can enable even a small economy to leverage economies of scale because businesses can produce a larger volume of goods to cater to a global audience. This often leads to a reduction in per-unit costs. At the same time, businesses in the small economy benefit from competition and the variety offered by several producers since international trade widens the range of goods and services available, which can stimulate innovation and efficiency.