When the two-good production and trade models are extended from a given country to the entire world
A)The price of the exported good falls for the country going global
B)The cost of producing the exported good rises for the country going global
C)The price of the imported good falls to the country's consumers
D)The price of both goods rises for the country going global

Question

Quizplus · Accepted Answer

When a country goes global with its production and trade models, it opens up to the world market, which means that it can import goods from other countries as well. This increased competition in the market can lead to a fall in the price of the imported good, which benefits the country's consumers. However, the price of the exported good may or may not fall, depending on the global demand and supply factors. The cost of producing the exported good may also rise or fall depending on the global factors, but there is no clear evidence to suggest that it will always rise. The price of both goods rising is also not a likely outcome, as it goes against the basic principles of supply and demand.

When the Two-Good Production and Trade Models Are Extended from a Given