Question

IN paragraph form, please trace the following scenario through the model. Describe the possible outcomes in the economy. You may graph and label a circular flow model (our version) and/or provide an abbreviated expression if it helps. Households decrease the amount of imports from trading partners abroad.

Answer 1

The imported products have lower price than the locally produced product..It shows a huge difference in quality and quantity....this only increases the import from abroad..If this situation has to be changed then The quality from households should be in a standard level and in a lower price.This will surely decrease the amount of imports from trading partners abroad.This is the sample graphical representation of the current situation