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Peter Pundit, an economics reporter, states that the European Union (EU) is increasing its productivity very rapidly inall industries. He claims that this productivity advance is sorapid that output from the EU in these industries will soon exceedthat of the United States and, as a result, the United States will no longer benefit from trade with the EU.
a. Do you think Peter Pundit is correct or not? If not,what do you think is the source of his mistake?
b. If the EU and the United States continue to trade,what do you think will characterize the goods that the EU exports to the United States and the goods that the United States exportsto the EU?
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