Question

can someone give me a simple explanation of the import fallacy

Answer 1

An import fallacy refers to the myth that the imports more than exports are not good for the economy.Country usually look to export more than they imports to create a favorable trade balance and to be more efficient however this is not correct as more imports don't make a country poorer or affect it's economic growth besides also bringing some capital knowledge and technical know how because as long as the country is able to attract foreign investment and continues to be a popular trade destination, then it can run a trade deficit.one of the famous example for this is United states which runs trade deficit but is a popular country to attract foreign capital so limiting imports is not advisable to boost economic growth and remove trade deficit.