When industries are limited by the size of the domestic market,opening trade to the world markets will likely lead to _____ and _____ real GDP per capita in the domestic country.

Question

Quizplus · Accepted Answer

Opening trade to world markets allows industries to access a larger market, which leads to economies of scale as they can produce more efficiently and at a lower cost per unit. This increase in efficiency and productivity leads to an increase in real GDP per capita in the domestic country.

When Industries Are Limited by the Size of the Domestic