Final answer:
Expanding two-way trade may have lower adjustment costs compared to expanding one-way trade. It is easier and less costly for businesses to engage in imports and exports with other countries.
Step-by-step explanation:
The statement suggests that the cost of adjusting to and expanding two-way trade is lower than the cost of expanding one-way trade. This means that it is easier and less costly for businesses to engage in imports and exports with other countries, rather than focusing solely on exporting or importing.
The adjustment costs may include factors such as transportation, communication, market research, cultural understanding, and infrastructure development.
For example, when a company decides to expand its operations to include both importing and exporting, it can leverage its existing resources, networks, and infrastructure to engage in two-way trade. This reduces the need for additional investments or adjustments compared to starting from scratch with only one-way trade.
In contrast, expanding one-way trade requires the business to establish new processes, relationships, and logistics to enter a new market or region. This often involves more costs, time, and effort because the business needs to adapt to the specific demands, regulations, and preferences of the foreign market.