Final answer:
An increase in global demand for a product your country imports may lead to higher prices, but can also drive domestic improvements in products and competitive pricing. It's not accurate to simply classify imports as 'bad' because the money can return to the economy through spending and exchange rates. Shifts in export and import demand also relate to global economic conditions, influencing international trade balances.
Step-by-step explanation:
When there is an increase in global demand for a type of product that your country imports, the impact on you as a consumer can vary. Higher global demand may lead to increased prices, assuming supply does not keep pace, potentially making the imported goods more expensive for you. However, this situation could also influence domestic producers to increase their output or improve their offerings, which may lead to better quality products or more competitive prices.
Consumer preferences and technology play a significant role in shaping import and export dynamics. Advances in technology or shifts in consumer preferences, like the increasing French demand for U.S. movies and music, can lead to higher levels of importation of certain goods and services, impacting both the importing and exporting nations economically through shifts in trade balances and exchange rates.
Nonetheless, it is not always correct to label imports as 'bad' and exports as 'good' for the economy. For instance, if an American consumer opts for a less expensive imported car rather than a domestic one, the savings could be spent elsewhere in the economy, thus cycling back into domestic growth. Moreover, the foreign company earning U.S. dollars would need to exchange these dollars, often leading to them purchasing American goods or services.
Furthermore, various factors such as changes in relative growth rates and relative prices between countries can cause shifts in export and import demand. For example, if economies that are major importers experience recessions, they might reduce their import volumes, which in turn affects the exporting countries' economies.