Lower transport costs that result in lower prices for Chinese manufactures in the Canadian economy:
A) reduce Chinese domestic consumption of manufactured goods.
B) reduce Canadian imports of Chinese manufactures and increase the Canadian current account balance.
C) reduce Canadian exports of fuels and commodities to China and reduce the Canadian current account balance.
D) increase Canadian imports of Chinese manufactures and reduce the Canadian current account balance.

Question

Quizplus · Accepted Answer

Lower transport costs make Chinese manufactured goods cheaper in Canada, leading to an increase in Canadian imports of these goods. This, in turn, would likely reduce the Canadian current account balance as more money flows out of Canada to pay for these imports.

Lower Transport Costs That Result in Lower Prices for Chinese