As a nation opens trade, the relative prices of products it imports will __________ and the relative prices of products it exports will ___________.

Question

Quizplus · Accepted Answer

When a nation opens trade, it will increase its imports and exports, which leads to a shift in demand and supply. The increase in demand for imports will cause their relative prices to fall due to increased competition, while the increase in supply for exports will cause their relative prices to rise. Therefore, the correct answer is B, as the relative prices of products it imports will fall, while the relative prices of products it exports will rise.

As a Nation Opens Trade, the Relative Prices of Products