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No conclusion can be given until the benefit cost

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Unformatted text preview: ve its current trade deficit problem by lowering the price of sugar, its primary export. Such an action would make Sacchar better able to compete for markets with other sugar-exporting countries. The sale of Sacchar’s sugar abroad would increase, and this increase would substantially reduce Sacchar’s trade deficit.” — Sacchar � � � � � � � �� � � � � � —µ * ? B6 · Sacchar ¤ E • “ * . 9o * Sacchar � p Ł + � Sacchar ¤ E • “ * � 1R �� � +� & B6 Increasing sales by lowering the price of sugar will not *?B6 yeild an increase in income unless the increase in sales is sufficient to overcome the loss in income due to the lower price. in the absence of ... 2U g U U 5=“ x ƒÎ * - ’E p5=“ 3 p è° ’ E A trade-deficit occurs when a country spends more on imports than it earns from exports. However, the author provides no evidence that substantiates this assumption. It is possible that revenues from imports will increase dramatically in the near future; if so, the course of action proposed by the author might be unnecessary to solve Sacchar's trade deficit proplem. To the extent th...
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