Final answer:
New trade theory is useful in explaining complex global trade patterns, including intra-industry trade, and can lead to a higher level of trade for an economy. However, the relationship between foreign trade involvement and trade imbalances is complex and unpredictable. The market revolution brought significant social and economic changes to the United States, a true statement. The correct option is A.
Step-by-step explanation:
New trade theory suggests that nations can gain a competitive advantage through specialization and increasing economies of scale. It also takes into account the concept of network effects and how they can enhance a country's position in the global market.
This is particularly useful in explaining complex trade patterns, such as the prevalence of intra-industry trade between similar economies, which traditional theories of absolute and comparative advantages may not fully account for. For instance, countries may export and import different types of cars or electronics with each other, rather than completely different goods.
Regarding the impact on trade levels or trade imbalances, new trade theory implies that an economy might experience a higher level of trade due to network effects and economies of scale. However, the relationship between involvement in foreign trade and trade imbalances can be unpredictable and is influenced by numerous factors.
While higher involvement in trade could lead to larger economies of scale and a competitive advantage, it might also result in higher trade imbalances if a country's imports substantially exceed its exports, or vice versa.
The market revolution did indeed bring many social and economic changes to the United States, which is a true statement. It led to more extensive market integration and contributed to changes in social structures and economic practices.