In your opinion, what will be better for the U.S. economy: A more open or less...

In your opinion, what will be better for the U.S. economy: A more open or less open economy with respect to the international flows of goods, services, labor and capital? In your opinion, do the benefits of being more open outweigh its disadvantages for businesses? For households?

Expert Solution

In my opinion, a more open economy with respect to the international flow of goods, services, labour and capital will be better for the US economy. This is because there are many advantages of the openness of the economy like-

Openness brings access to larger markets and hence the possibilities to reap the benefits of increasing returns to scale and specialization.
Competition from foreign firms helps to improve the productivity of the domestic firms.
It makes available a large variety of goods and services in the economy.
It brings foreign investment in the home country.
There is exchange of different technologies of production.

According to me, the benefits of being more open outweighs its disadvantages both for businesses and households in most of the cases. This is because there are few disadvantages of openness but there are many benefits of it for an advanced country like US as it gets a large market for its goods and services and many different commodities from different countries.

Rahul Sunny answered 2 years ago

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