6. Suppose a country seeks to maximize the country\'s total goods available for

Question

6. Suppose a country seeks to maximize the country's total goods available for consumption. Suppose there is world trade and the country can at any time choose to trade or not. (Eaclh section of this question counts as 2 points) a) Does access to trade ever decrease the country's total consumption? Be sure to explain your answer thoroughly. b)Suppose trade increases the country's overall consumption. Does mean every individual is better off? Why or why not, and explain. c) ftrade increases the country's overall consumption and the government is free to tax and make payments to individuals is it possible to enact a policy that makes everyone better off? If so, outline one possible example. If it is not possible, explain why

Explanation / Answer

ans (a) No access to trade never decrease the country total consumption because if country have large amount of goods available for consumption and for world trade this will help the country's economic growth and also beneficial for traders of the country.

ans (b) yes trade increases the country's overall consumption will beneficial to every individual also because its a overall development thats why every individual is better off too.

ans (c) Government acquisition of goods and services for current use to directly satisfy individual or collective needs of the members of the community is called government final consumption expenditure (GFCE.) It is a purchase from the national accounts "use of income account" for goods and services directly satisfying of individual needs or collective needs of members of the community GFCE consists of the value of the goods and services produced by the government itself other than own-account capital formation and sales and of purchases by the government of goods and services produced by market producers that are supplied to households – without any transformation – as "social transfers" in kind

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