Which of the following is an effect of the digital economy?

• A. Lower levels of information availability
• B. Decreased use of technology in production
• C. Increased access to global markets
• D. Reduced competition among firms

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of the digital economy, which refers to an economy that is based on digital computing technologies, often involving the internet, digital communication, and information availability.
2. Step 2: Analyze each option in the context of the digital economy. For example, consider whether the digital economy would likely increase or decrease information availability.
3. Step 3: Recognize that the digital economy typically increases the use of technology in production rather than decreasing it, so options suggesting decreased technology use are less likely to be correct.
4. Step 4: Consider how the digital economy affects market access. The digital economy often enables businesses to reach customers beyond local or national boundaries, thus increasing access to global markets.
5. Step 5: Evaluate the impact on competition. The digital economy usually increases competition by lowering barriers to entry and enabling more firms to participate in markets, so reduced competition is unlikely.