As a nation increases its production of exports, demand
For all factors of production used in those firms:
A)will rise.
B)will fall.
C)will remain the same.
D)will decrease but only slightly.

Question

Quizplus · Accepted Answer

When a nation increases its production of exports, the demand for factors of production used in those firms, such as labor and capital, will rise. This is because an increase in exports requires more resources to produce the exported goods or services. Therefore, all factors of production will be in greater demand, leading to an increase in their prices and higher incomes for the owners of those factors.

As a Nation Increases Its Production of Exports, Demand