Final answer:
Dumping in world markets typically increases during economic recessions and is associated with predatory pricing and trade imbalances. Anti-dumping laws are used to counteract this practice, with their use fluctuating based on the economic cycle.
Step-by-step explanation:
Dumping in world markets is most likely to increase during periods of economic recession. During recessions, firms may engage in predatory pricing strategies, such as selling goods at prices below the cost of production to drive out domestic competition. Once competitors are driven out, these firms may raise prices. This practice is often challenged through anti-dumping laws which impose tariffs on such imports to level the playing field. The applications of these laws are cyclical, increasing during economic downturns as countries start more anti-dumping investigations. High levels of international financial flows and capital inflows can also contribute to trade imbalances, which may exacerbate the conditions that encourage dumping.