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What impact does consumer purchase of imported goods and services have on the US economy?
Wiki User
∙ 13y ago
Assuming trade is relatively free and purchase of the imported goods and services is rational, then then there are two principal outcomes:
1) Societal welfare is increased. This occurs because consumers are achieving equivalent levels of utility at lower price levels. While some social welfare is lost by the transfer of production from the domestic locale to foreign, specialisation also occurs in other industries for the domestic market.
2) Assuming a simplified Hecksler-Ohlin model, industries which are based on the primary input of the imported good are competed against. For example, import of Chinese manufactures causes welfare lose to local manufacturers because their profits and source revenues are slashed. Additionally, redistribution of inputs to more profitable industries (who sell to the other country) raises their cost of production. Overall, however, their welfare loss is strictly less than society's. Therefore, a Pareto improvement occurs.
Wiki User
∙ 13y ago
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the purchase of a consumer (CONSUMER) (: welcomeee
How do increase in consumer spending affect the economy?
With an increase in consumer spending, there will be an increase in demand for goods/services, and therefore an increase in production, which drives the economy up.
What is the role of a consumer in an Economy?
Someone whose role is to use goods and/or services.
Which of the following terms best describes an economy in which producers of goods and services react to consumer choices?
market economy
In which type of economy are the producers of the goods in services able to react to consumer choices?
market
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re-selling imported consumer goods
What motivates the Market economy?
the purchase of a consumer (CONSUMER) (: welcomeee
How do increase in consumer spending affect the economy?
With an increase in consumer spending, there will be an increase in demand for goods/services, and therefore an increase in production, which drives the economy up.
What is the role of a consumer in an Economy?
Someone whose role is to use goods and/or services.
Which of the following terms best describes an economy in which producers of goods and services react to consumer choices?
market economy
In which type of economy are the producers of the goods in services able to react to consumer choices?
market
In which type of economy are choices made by consumers?
market
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Capitalist. Aplus answer Market
what type of economy are the producers of good and services able to react to consumer choices?
Capitalist. Aplus answer Market
What does the economy have to do with?
The economy involves the sale and the purchase of goods and services, and all of the complex consequences and ramifications of those sales and purchases.
In which type of economy are the producers of goods and services able to react to consumer choices?
Capitalist. Aplus answer Market
