Opening the economy to international trade tends to lessen inflationary pressures at home.

Question

Quizplus · Accepted Answer

Opening the economy to international trade increases competition and supplies, which tends to lower prices and reduce inflationary pressures in the domestic market. The increased variety of goods and services often leads to more efficient production and distribution, further reducing costs and prices. However, in some cases, increased imports may lead to job losses and downward pressure on wages, which may limit consumer demand and economic growth. Additionally, fluctuations in global prices and exchange rates can affect domestic inflation and other economic indicators.

Opening the Economy to International Trade Tends to Lessen Inflationary