Explain Why International Trade in Goods and Services Is Becoming

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The Answer is During the 1980s, world economic output grew at 3.3% per year, and the low-income economies were growing faster than the other country groups. During the 1990s, world economic growth slowed to 2.7% per year, and only the middle-income economies increased their rate of growth over the two decades. The trends with respect to the growth rate of exports for the same time periods for the various economies indicate that during the 1980s, world exports grew at 5.2% per year, while the growth rate of world exports increased to 6.9% during the 1990s. These differences in the growth rates of production and exports imply several things. First, the faster production growth rates in the middle-income economies imply that over time, these economies will account for an increasingly important part of world output. Because income growth is tied to production growth, this means that income in these economies is also rising. Over time, the higher production growth is leading to a higher growth rate of exports of goods and services for these economies. Further, the rapid growth of GDP for these economies leads to a faster growth rate for imports.

Explain Why International Trade in Goods and Services Is Becoming

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Explain Why International Trade in Goods and Services Is Becoming

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Correct Answer:
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