As trade restrictions are eliminated,increased imports
A)Lower competition in product markets.
B)Leave the composition of the GDP unchanged.
C)Shift the allocation of resources away from import-competing industries.
D)Redistribute income out of import-using industries.

Question

Quizplus · Accepted Answer

When trade restrictions are eliminated, increased imports may lead to a shift in the allocation of resources away from import-competing industries. This is because foreign goods may become cheaper and the domestic industries may not be able to compete, leading to a decrease in production and employment in those sectors. This shift may also involve a reallocation of resources towards industries where the country has a comparative advantage, leading to an increase in efficiency and economic growth. However, increased imports do not necessarily lower competition in product markets, leave the composition of the GDP unchanged, or redistribute income out of import-using industries.

As Trade Restrictions Are Eliminated,increased Imports