If a country allows trade and the price of a good falls as a result:
A)the domestic price is higher than the world price and the country will import the good
B)the domestic price is lower than the world price and the country will import the good
C)the domestic price is higher than the world price and the country will export the good
D)the domestic price is lower than the world price and the country will export the good

Question

Quizplus · Accepted Answer

When a country allows trade and the price of a good falls, it indicates that the world price of the good is lower than the domestic price, leading the country to import the good to take advantage of the lower prices available internationally.

If a Country Allows Trade and the Price of a Good