As an economy opens up to international trade, domestic prices

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As an economy opens up to international trade, domestic prices tend to align more with international prices. This is because as trade barriers are reduced, the competition in the domestic market increases, and firms adjust their prices to be more competitive with international prices. This can also lead to greater efficiency and productivity in domestic firms as they try to compete on a global scale. As a result, domestic prices become more closely aligned with international prices.

As an Economy Opens Up to International Trade, Domestic Prices