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If a nation exported much of its output but imported little, would it be better or worse off? How about the reverse; that is, exporting little but importing a lot?

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Divya Singh
Divya SinghLv10
29 Sep 2019

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Related questions

At one time, it was believed that the way for a nation to prosper was to export as much as possible while importing as little as possible. More money would flow into a country than out of a country. Is this really a sound economic strategy? What is the relationship between exports and imports?

7) If Nation 1 has an absolute disadvantage in the production of fur hats and shoes when compared to Nation 2, it is still possible that Nation 2 can move resources into the production of shoes and trade for fur hats imported from N1 and thereby make consumers in both nations better off if:

(Select 1) multiple choice

Shoes imported from Nation 2 require that relatively fewer fur hats be produced than would be the case in Nation 1.

Nation 2 can make fur hats by giving up relatively fewer shoes than Nation 1.

Nation 1 can make a fur hat by giving up the same number of shoes as in Nation 2.

In Nation 1, the relative price of shoes to fur hats is higher than it is in Nation 2, thus giving Nation 1 an incentive to import shoes from Nation 2 in exchange for relatively cheaper fur hats exported to N2.

In Nation 2, the relative price of shoes to fur hats is higher than in Nation 1, thus giving Nation 2 an incentive to export over priced shoes to Nation 1 in exchange for fur hats that cost about the same.

55) Now that the market is open to trade at a "world" price of $5, A) domestic consumers will be made worse off but domestic producers will be made better off. B) domestic consumers will be made better off but domestic producers will be made worse off. C) both domestic consumers and producers will be made worse off. D) both domestic consumers and producers will be made better off. E) we do not have enough information to tell who is made better or worse off.

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