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Principles of Macroeconomics (Mind...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305971509
BuyFind

Principles of Macroeconomics (Mind...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305971509

Solutions

Chapter
Section
Chapter 9, Problem 2QR
Textbook Problem
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When does a country become an exporter of a good? An importer?

Expert Solution
To determine
When the country becomes an importer and when it becomes an exporter.

Explanation of Solution

The international trade is the exchange of goods and services between different nations in the world. The exchange will take place and the main two processes are the export and imports. The exports is the sale of domestic goods to the foreigners and imports is the vice versa.

When the domestic price of the good is lower than the international price of the commodity without trade, it means the opportunity cost of production is lower in the domestic country than the foreign country. This means that the domestic country has the comparative advantages of production in the commodity compared to the foreign country...

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