Mauritius, an island off the coast of Africa, competes with other countries producing goods with low-skilled labor. In 2006, it was reported that its "... factories have been exposed to ... competition from China, India and other Asian mass producers." As a result, "the main export industry has seen a 30 per cent reduction in volume ..."
Www)ft.com, 3/13/2006
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Question

Quizplus · Accepted Answer

CA decrease in autonomous expenditure is indicated by the reduction in export volume due to increased competition, which is an external factor not directly related to the income level of Mauritius. An unplanned decrease in inventories could occur as a result of the sudden drop in demand for Mauritius's exports, leading to goods being unsold and accumulating as inventory.

Mauritius, an Island Off the Coast of Africa, Competes with Other