Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Provide viable explanations to illustrate the below.
Immizerizing Growth
Expert Solution
Step 1
The immizerizing growth is proposed by Indian born American economist Jagdish Bhagwati in the year 1958.
Step 2
According the immizerizing growth theory, economic growth process (mainly export based) bring increase in total output and wealth effect become positive, but it worsen or create imbalances in the overall terms of trade. This trade imbalance leads to trade deficit. Thereby, there is a net decline in the welfare of nation.
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