Which of the following statements best explains the reason that ...

[mckennatimberlake]

Which of the following statements best explains the reason that many economists adhere to the concept of free trade between nations?
 
  A) Unrestricted international trade increases the prosperity of poor nations.
  B) Lower-cost imports reduce the expenses of firms by reducing wages.
  C) Domestic product prices tend to remain lower than imported products.
  D) Inexpensive exports increase consumer prosperity by reducing expenses.

Question 2

What is the difference between exporting and importing? What are the unique characteristics of service exports and service imports?
 
  What will be an ideal response?

[Laurenleakan]

Answer to Question 1

A

Answer to Question 2

Exporting is the sale of goods or services produced by a firm based in one country to customers that reside in another country. Exports involve any good or service that is traded from sellers in one country to buyers in another country. Exportable products can include goods, services, or intellectual property. Importing is the purchase of a good or service by a buyer in one country from a seller in another. The import of services has subtle characteristics. For example, the installation of nuclear power equipment in Sweden by French firm Areva, even though it is a hard good, qualifies as a service import for Sweden. The standard to keep in mind is that an import of a service consists of any transaction that 1. does not result in ownership and 2. is rendered by non-residents to residents. Lastly, it clarifies matters by defining what is not a service export. Opening a Starbucks in a foreign market, which is generally regarded as a service enterprise, is not a service export. Foreign ownership of some or all of the productive assets of the local operation qualifies it as a foreign direct investment. Service exports typically include higher education, management consultants, and investment banks.