Compared with autarky,international trade leads to _____ domestic production in exporting industries and _____ domestic production in import-competing industries.

Question

Quizplus · Accepted Answer

International trade allows exporting industries to expand their market beyond domestic borders, increasing domestic production. On the other hand, domestic producers of import-competing industries may face competition from foreign countries, leading to a decrease in domestic production. Therefore, international trade leads to higher domestic production in exporting industries and lower domestic production in import-competing industries.

Compared with Autarky,international Trade Leads to _____ Domestic Production in Exporting