Peter Pundit an economics reporter, states that the EuropeanUnion (EU) is increa

Question

Peter Pundit an economics reporter, states that the EuropeanUnion (EU) is increasing its productivity very rapidly in allindustries. He claim that this productivity advance is so rapidthat output from the EU in these industries will soon exceed thatof the United States and as a result, the United States will nolonger benefit from trade with the EU. a. Do you think Peter Pundit is correct or not? If not, whatdo you think is the source of his mistake? b. If the EU and the United States continue to trade, what doyou think will characterize the goods that the EU exports to theUnited States and the goods that the United States exports to theEU? Peter Pundit an economics reporter, states that the EuropeanUnion (EU) is increasing its productivity very rapidly in allindustries. He claim that this productivity advance is so rapidthat output from the EU in these industries will soon exceed thatof the United States and as a result, the United States will nolonger benefit from trade with the EU. a. Do you think Peter Pundit is correct or not? If not, whatdo you think is the source of his mistake? b. If the EU and the United States continue to trade, what doyou think will characterize the goods that the EU exports to theUnited States and the goods that the United States exports to theEU?

Explanation / Answer

a) Peter Pundit is wrong in hisstatement. Due to the highly increasing productivity in the EU,their prices will get cheaper. The excess amount of goods willcause this and inturn make US goods more expensive. Now the US willbe able to purchase goods from the EU for less. However, eventhough it maybe good in the short time length, if itcontinues, Americans would be spending thier money to foreigncountries and not be giving it back to the USeconomy/government. b) If the EU and the US continue totrade, EU goods will be cheaper/easier to sell then the USgoods that will cost more money.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.