Question

The export base theory and its multiplication math assumes that all growth is equal and desirable. What could be some of the assumptions behind this mindset?

SELECT ALL THAT APPLY

1. Assumes that the additional tax revenue from all sources: property, income, sales will cover the additional cost of providing services to a larger population.
2. Assumes that the housing market will accomodate new residents without displacing existing residents who may have fixed incomes.
3. Assumes that additional traffic in a community is desired.

Answer 1

Export base theory suggests how an economy exports goods to other economies and brings money in to the local economy. It takes in to account how the economy chooses its target products for export and its target economy. This theory assumes

• Without export markets the expansion of any country is merely impossible.
• Currency exchange rates may help in development of export of a region
• Additional tax revenue from all the sources: Property, income and sales will cover the additional cost of providing service to the larger populations.
  This is because the export taxes are levied on the goods.
• Assumes that the housing market will accommodate new residents without displacing existing residents who may have fixed incomes.
  This is because; the local economy chooses such target economy for its exports in which there is a huge demand for their product and can hence gain profits.