In a two-commodity world, balanced growth in a country always decreases its willingness to trade because the country becomes self-sufficient in the production of both the goods.

Question

Quizplus · Accepted Answer

Balanced growth in a country can increase its willingness to trade because it may have a comparative advantage in the production of one of the goods over other countries, leading to exports and imports of different goods. Additionally, even if the country is self-sufficient in the production of both goods, it may still benefit from trading with other countries to access a wider variety of products and to achieve economies of scale.

In a Two-Commodity World, Balanced Growth in a Country Always