The United States imports shoes from third world countries. This means that if the U.S. economy were closed, the domestic price of goods would be ________ the world price of shoes.

Question

Quizplus · Accepted Answer

If the price of a good or service in a closed economy is greater than the world price, and that economy opens itself to trade, the economy will tend to become a net importer of that good or service.

The United States Imports Shoes from Third World Countries