A country brings in components that it then uses to produce electrical goods for sale in the domestic market. Incomes in the country are rising. What is likely to be the effect on the price of electrical goods and on the country’s balance of trade?
- Aprice of electrical goods: fall; balance of trade: improve
- Bprice: fall; balance of trade: worsen
- Cprice: rise; balance of trade: improve
- Dprice: rise; balance of trade: worsen