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Not sure this is correct.....

The reason for this is that it is cheaper to buy from other countries where the costs of production are cheaper.

In a country with an advanced economy, primary and secondary industries are likely to be depressed, or uncompetitive. Thus they are restricted to niche and specialist goods. Tertiary industry will likely make a lot of money for the country, and specifically employees of such companies. As the general level of wealth in a country rises, the people will demand more and more goods, and these must be imported to satisfy demand. Thus a negative balance of payments can be generated, but is not necessarily indicative of negative economic activity.

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Last edited December 15, 2001 1:22 am by Chenyu (diff)