Answer to Question #105638 in Microeconomics for Abelo

Question

International trade and foreign investment can solve the problem identified in the big pus & o ring model?

Answer 1

Solution:

International trade and foreign investment contribute to the effectiveness of the use of a particular economy. Consequently, they reduce the effect of external pressure on the economy.

However, the essence of reducing external impact changes only when investments come to industries where their effectiveness is highest. That is, there is an inverse proportion between the quality of investment process management and external influence on the economy.