9. If a large nation experiences growth of its abundant input, other things held constant, one would expect that in the post-growth trade equilibrium, a. Its welfare increases not only because of outward shift in the PPF but also because of the more favourable terms of trade. b. Its welfare decreases because of the adverse effects on its terms of trade as well as due to the excess supply of its export good. c. Its welfare increases because of the growth of the input but decreases because of the adverse terms of trade, with the overall effect being uncertain. d. Its welfare will increase.

9. If a large nation experiences growth of its abundant input, other things held constant, one would expect that in the post-growth trade equilibrium, a. Its welfare increases not only because of outward shift in the PPF but also because of the more favourable terms of trade. b. Its welfare decreases because of the adverse effects on its terms of trade as well as due to the excess supply of its export good. c. Its welfare increases because of the growth of the input but decreases because of the adverse terms of trade, with the overall effect being uncertain. d. Its welfare will increase.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 35P: If trade increases world GDP by 1 per year, what is the global impact of this increase over 10...

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