Large countries are _____ susceptible to immiserizing growth than small countries because when large countries expand their exports, their terms of trade _____.

Question

Quizplus · Accepted Answer

Large countries are more susceptible to immiserizing growth than small countries because when they expand their exports, the increase in supply leads to a fall in price, which results in a worsening of their terms of trade. This means that the increase in export revenue will not be enough to offset the loss in income due to the fall in price, leading to a decrease in their welfare.

Large Countries Are _____ Susceptible to Immiserizing Growth Than Small