If a country imports more than it
exports, it runs a trade deficit. Most countries would prefer to import less
and export more. In other words, a country would prefer to be a supplier to
other countries. Their leaders encourage export-driven economies.
First, it's a fast way to boost economic output, as measured by gross domestic product. That creates jobs and increases wages. In turn, this raises residents' standard of living for residents. That makes them much more likely to vote for their national leaders in democracies. In countries without an elected leader, it means there's less likelihood of a revolution.
First, it's a fast way to boost economic output, as measured by gross domestic product. That creates jobs and increases wages. In turn, this raises residents' standard of living for residents. That makes them much more likely to vote for their national leaders in democracies. In countries without an elected leader, it means there's less likelihood of a revolution.
Second, imports make a country dependent.
That's especially true if it imports commodities, such as food, oil, and
industrial materials. Then they rely on a foreign power to keep their
population fed and their factories humming.
Third, countries with high import levels must increase their foreign currency reserves. That's how they pay for the imports. That can affect the domestic currency value, inflation, and interest rates.
Fourth, domestic companies must compete
with the imports. That can drive many small businesses to bankruptcy.
But, if they succeed, they gain a
competitive advantage. Through exporting, they learn to produce a variety of
globally-demanded goods and services.
No comments:
Post a Comment