Answer to Question #49380 in Macroeconomics for Uday Bhaskar
International trade plays an increasingly important role in shaping the performance of the economy. The value of exports sold overseas will be injected into the circular flow, whilst spending by consumers and businesses on imported products represent a leakage from the flow. (Goods and services are coming into the economy to satisfy domestic demand, but money to pay for them is flowing out of the economy).
That's why, after 1991 economic liberation, the circular flow of income is greatly affected specially with reference to foreign trade transactions.
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!