As trade restrictions are eliminated,increased imports

Question

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Increased imports due to the elimination of trade restrictions will result in a shift in the allocation of resources away from import-competing industries. This is because these industries will face greater competition from foreign producers, making it harder for them to secure market share and generate profits. As a result, firms in these industries are likely to cut production and employment, while firms in industries that benefit from increased imports (such as those that rely on lower-priced inputs from abroad) are likely to expand. This shift in resource allocation can have significant implications for the overall structure of the economy and the composition of GDP, as the relative importance of different sectors is likely to change over time.

As Trade Restrictions Are Eliminated,increased Imports