Experience immiserizing growth

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Consider a small nation producing both computers (y-axis) and coffee (x-axis) and facing increasing opportunity costs. Starting from a free trade equilibrium where this nation exports coffee and imports computers, can this nation experience “immiserizing growth”? Graphically illustrate your answer – you should have two graphs, one for biased growth in the exporting good and one for biased growth in the importing good. What can you say about the volume of trade?

Reference no: EM131004609

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