Which of the following statements is true?

Question

Quizplus · Accepted Answer

If the domestic price of a good in a country is higher than the world price, it would make more sense for the country to import the good from other countries where it is cheaper rather than producing it domestically at a higher cost. Therefore, the country will become an importer of the good. Option A is incorrect because if the domestic price is higher than the world price, it does not necessarily guarantee that the country will export the good. Option B is incorrect as the export or import decision depends on the comparison of domestic and world prices. Option D is incorrect because the domestic price is a factor that affects the export or import decision.

Which of the Following Statements Is True