As a nation increases its production of exports, demand for specific or fixed factors (such as capital and land) used in the exporting sector will: A) rise. B) fall. C) remain the same. D) decrease but only slightly.

Question

Quizplus · Accepted Answer

As a nation increases its production of exports, the demand for specific or fixed factors like capital and land used in the exporting sector will rise. This is because when exports are produced, more resources are needed to continue this production, and these resources are limited in supply. Therefore, the demand for these factors will rise causing an increase in their prices.

As a Nation Increases Its Production of Exports, Demand for