A nation with cheap, efficient communications is likely to be
A) richer, ceteris paribus, because transaction costs will be lower and trade greater.
B) richer only if production of goods is cheaper, too, since trade itself cannot create value.
C) poorer since it spends so much on communication instead of true productivity.
D) spending too much on communications, which adds nothing to the value of output.

Question

Quizplus · Accepted Answer

Efficient communications reduce transaction costs, facilitating trade and economic growth, leading to a richer nation.

A Nation with Cheap, Efficient Communications Is Likely to Be