Under free trade,countries will __________ goods for which their closed-economy domestic price exceeds the world price and __________ goods for which their closed-economy domestic price is less than the world price.

Question

Quizplus · Accepted Answer

Countries will import goods for which their domestic price is higher than the world price, as it is cheaper to buy from abroad. Conversely, they will export goods for which their domestic price is lower than the world price, as they can sell them at a higher price internationally.

Under Free Trade,countries Will __________ Goods for Which Their Closed-Economy