Author Question: Is it possible that trade could prevent the development of new and more efficient industries? ... (Read 77 times)

WhattoUnderstand · **on:** Jun 30, 2018

Is it possible that trade could prevent the development of new and more efficient industries?

What will be an ideal response?

Question 2

Movement of the fast-growing Asian nations through the demographic transition may have had an impact on growth rates because it

A) reduced expenditures on health care.
B) reduced expenditures on pensions.
C) increased savings.
D) increased consumption relative to GDP.

sierrahalpin · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Yes, under certain circumstances. Using the textbook example, suppose that Europeans are potentially more efficient at making commercial aircraft than Americans. Their potential can only be realized, however, after a period of experimentation and development. The initial problem they face is that the efficiency advantage goes to the United States because of its better developed linkages between suppliers and producers. The availability of existing planes at a cost that is lower than initial costs will be in the European industry may deter the development of the industry.

Answer to Question 2

C