A permanent reduction in international trade barriers would
A) decrease long-run aggregate supply.
B) increase long-run aggregate supply.
C) decrease aggregate demand.
D) increase aggregate demand.

Question

Quizplus · Accepted Answer

A permanent reduction in international trade barriers would increase the level of international trade and thus increase the economy's access to a wider range of goods and services at lower prices. This would increase productivity and efficiency and result in an increase in long-run aggregate supply.

A Permanent Reduction in International Trade Barriers Would