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Decrease in Imports and Economic Growth Rate

Question

Discuss whether a decrease in imports would increase a country’s economic growth rate.

Category:

Macroeconomic Factors and Policies

Frequently asked question

Preview Answer

I. 🍃Introduction
- Definition of lower imports
- Importance of understanding the reasons for lower imports

II. Reasons why lower imports might be beneficial
- Increase in international competitiveness of domestic products
- Replacement of imports by domestic products
- Increase in total demand and output
- Expansion of infant industries
- Increase in domestic employment

III. Reasons why lower imports might not be beneficial
- Consumers spending less in total
- Imports of raw materials or capital goods falling
- Reduction in incomes of other countries
- Pushing up of exchange rate and raising the price of exports
- Imposition of trade restrictions leading to retaliation and reduction in exports

IV. 👉Conclusion
- Summary of the reasons for and against lower imports
- Importance of considering the specific circumstances of each case

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