When a nation starts opening up to international trade, it will see falling prices for:

Question

Quizplus · Accepted Answer

When a nation starts opening up to international trade, it will see falling prices for goods that it imports. This is because the increased competition from foreign suppliers will lead to lower prices for these goods in the domestic market. Prices for goods that a nation exports may or may not be affected depending on the demand for those goods in other countries. Prices for goods that a nation has a comparative advantage in may also fall as increased production leads to economies of scale and lower costs, but this is not guaranteed. The statement "All goods traded" is too broad and cannot be applied universally.

When a Nation Starts Opening Up to International Trade, It