which of the following changes in trade would produce the greatest increase in gdp?
increase exportsm& increase imports
increase exports & decrease imports
decrease exports & increase imports
decrease exports & decrease imports
my answer is the 2nd one
I agree.
Thank you
You're welcome.
p1and q2
Water of Dryness anyone
To determine which change in trade would produce the greatest increase in GDP, we need to understand the relationship between trade and GDP. GDP (Gross Domestic Product) measures the total value of goods and services produced within a country over a particular period.
Increase in exports generally leads to an increase in GDP because exports represent the goods and services produced domestically that are sold to other countries. This increases the demand for domestic products, leading to increased production, employment, and economic activity.
On the other hand, an increase in imports means that more goods and services are being purchased from other countries. While it may not directly impact GDP positively, it can benefit the domestic economy by providing consumers with a wider range of choices, competitive pricing, and potential cost savings.
Option 1: Increase exports and increase imports - This option suggests expanding both exports and imports. While increasing exports may have a positive impact on GDP, the increase in imports might offset some of the gains by diverting consumer spending towards foreign goods.
Option 2: Increase exports and decrease imports - This option involves expanding exports while reducing imports. By decreasing imports, more consumer spending is directed towards domestically produced goods. This can contribute to increased production, employment, and GDP growth. Therefore, this option could potentially have the greatest positive impact on GDP.
Option 3: Decrease exports and increase imports - This option suggests reducing exports while increasing imports. Decreasing exports would likely decrease production, employment, and overall economic activity, leading to a negative impact on GDP.
Option 4: Decrease exports and decrease imports - This option involves reducing both exports and imports. Both actions can restrict trade and lead to reduced economic activity, resulting in a negative impact on GDP.
Given the options provided, it appears that your answer, the second option (increase exports and decrease imports), would likely produce the greatest increase in GDP.