Asked by Elisabeth breivik Nilsen on Apr 27, 2024
Verified
If the world price of a good is greater than the domestic price in a country that can engage in international trade, then that country becomes an importer of that good.
World Price
The price at which goods are traded internationally, determined by global supply and demand conditions.
Domestic Price
The price of goods or services within a country's borders, as opposed to their price in the international market.
Importer
An individual or entity that buys goods or services from another country for sale or use in their own country.
- Understand the conditions under which a country becomes an importer or exporter of goods.
Verified Answer
DF
David FeynbergApr 29, 2024
Final Answer :
False
Explanation :
If the world price of a good is greater than the domestic price, the country has a comparative advantage and would become an exporter of that good, not an importer.
Learning Objectives
- Understand the conditions under which a country becomes an importer or exporter of goods.