If a nation exports a good when the economy is opened to trade,relative to the autarky price,the domestic price of the good will _____ and domestic consumption will _____.

Question

Quizplus · Accepted Answer

When a nation exports a good, the domestic price of the good increases because the good is now being sold in a larger international market, which increases demand for it. However, as the domestic price rises, domestic consumption falls because the good becomes more expensive for domestic consumers.

If a Nation Exports a Good When the Economy Is