Question

a country that engages in international trade will find that it increases the demand for the...

a country that engages in international trade will find that it increases the demand for the factors (of production) used by the exporting industries and decreases the demand for the factors used in the import-competing industries. Is this true or false?

Homework Answers

Answer #1


Yes, it is true

When a country opens its doors to international trade, it will find some industries exporting their goods and experiencing an increase in their demand; while some industries compete with imported products.

This means, while demand and production of exporting countries will increase; the demand for import competing domestic countries will fall as they will face tough foreign competition and their market share will decrease and thus the consumer base they cater to will also decrease.

This means with increase in production of exporting industries, demand for factors of production used by these countries will increase.

On the same lines, a fall in the production of import competing companies will lead to a fall in factors of production used in import competing industries.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) According to the factor price equaluzation theory, the effect of international trade is to equalize...
1) According to the factor price equaluzation theory, the effect of international trade is to equalize the returns to resource factors of production between trading partners. True or False? 2) When a large nation levies a tariff on an imported good, its overall welfare increases if the value of the tariff's consumption and protective effects is greater than the value of the terms-of-trade effect. True or False? 3) For the commodity terms of trade to improve, a country's export price...
What industries and job skills in the United States have benefitted from growth of international trade?...
What industries and job skills in the United States have benefitted from growth of international trade? Which ones have suffered? Have the resources, including workers, in import-competing industries been able to shift into areas where demand is growing? What may be limiting the transition? What are the implications of restricting trade on both exporting industries and import-competing industries?
According to the Specific Factor Model, international trade produces winners and losers within a country because...
According to the Specific Factor Model, international trade produces winners and losers within a country because in the short run, some production factors are specific to the production of a particular product or service. true or false with justification why?
1. True/False: In the HO model, relative to autarky prices in a country, trade always increases...
1. True/False: In the HO model, relative to autarky prices in a country, trade always increases price of the good that country exports in the traded equilibrium 2. True/False: In the HO model, trade always decreases the relative return of the relatively abundant factor. 3. True/False: In the HO model, trade always decreases the relative return of the relatively scarce factor. 4. True/False: In the HO model, trade always increases the relative return of the relatively abundant factor. 5. True/False...
Which of the following statement is INCORRECT about international trade? Any trade barrier such as tariff...
Which of the following statement is INCORRECT about international trade? Any trade barrier such as tariff or quota decreases the welfare of import country. The key gain from trade is that both countries can consume outside their PPF. When a country’s currency depreciates, the country’s exports will increase in the short run. When a developing country trades with a developed country, the former always benefits but the later may or may not benefit. 2. Which of the following explains the...
Why is a country able to consume outside its production possibilities frontier when it engages in...
Why is a country able to consume outside its production possibilities frontier when it engages in international trade?
Illustrate and discuss the following factors given international trade occurs: Production inside the country with and...
Illustrate and discuss the following factors given international trade occurs: Production inside the country with and without world trade. Consumption inside the country with and without world trade. Show the amount of production that comes from outside the country (from the world). Price of goods inside the country with and without world trade. In this scenario, who are the winners when world trade is allowed and why? In this scenario, who are the losers when world trade is allowed and...
Illustrate and discuss the following factors given international trade occurs: Production inside the country with and...
Illustrate and discuss the following factors given international trade occurs: Production inside the country with and without world trade. Consumption inside the country with and without world trade. Show the amount of production that comes from outside the country (from the world). Price of goods inside the country with and without world trade. In this scenario, who are the winners when world trade is allowed and why? In this scenario, who are the losers when world trade is allowed and...
Quotas are favoured over free international trade by:? ?consumers in the importing country and consumers in...
Quotas are favoured over free international trade by:? ?consumers in the importing country and consumers in the exporting country. ?domestic producers in the importing country and foreign producers with quota rights. ?domestic producers and domestic consumers in the exporting country. ?foreign producers without quota rights and consumers in the importing country. ?foreign consumers and domestic producers in the exporting country. Retaliation of trade restrictions can: set off still greater trade restrictions, leading to an outright trade war. recover the surplus...
True or False _____ 1. The producer is not engaging is international marketing in any real...
True or False _____ 1. The producer is not engaging is international marketing in any real sense with indirect exporting. _____ 2. The nature of wholesaling in a country tends to vary with its level of economic development. _____ 3. Promotion is the most culture bound of the marketing activities the firm engages in.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT