Which of the following conditions is NOT necessary for immiserizing growth to arise in a country?
A) The country's growth must be strongly biased toward expanding the country's supply of exports and the increase in exports must be large enough to have a noticeable impact on world prices.
B) The foreign demand for the country's exports must be price inelastic so that an expansion in the country's export supply leads to a large drop in the international price of the export product.
C) Before the growth, the country must be heavily engaged in trade so that the welfare loss from the decline in the terms of trade is great enough to offset the gains from being able to produce more.
D) The country must specialize in the production of a single exportable good and import all the other goods consumed in the economy.
Correct Answer:
Verified
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