Which of the following is an advantage that localized economies may have over more globalized economies?

• A. Greater responsiveness to local consumer preferences
• B. Reduced ability to adapt to local regulations
• C. Increased dependence on foreign supply chains
• D. Higher exposure to international market fluctuations

Answer: (A)

Verified step by step guidance

1. Understand the concept of localized economies: These are economies that focus on local production, consumption, and business activities within a specific geographic area, rather than relying heavily on international trade or global supply chains.
2. Identify the characteristics of localized economies: They tend to be more closely connected to local consumers, local regulations, and local resources, which can influence their flexibility and responsiveness.
3. Compare localized economies to globalized economies: Globalized economies are more integrated with international markets, which can lead to benefits like economies of scale but also risks such as exposure to international market fluctuations and dependence on foreign supply chains.
4. Analyze each option in the problem: 'Greater responsiveness to local consumer preferences' aligns with the idea that localized economies can quickly adapt to the specific needs and tastes of their local market, which is an advantage.
5. Conclude that the other options (reduced ability to adapt to local regulations, increased dependence on foreign supply chains, higher exposure to international market fluctuations) are disadvantages or characteristics more typical of globalized economies, not advantages of localized economies.