Final answer:
Dropping subcharges and tariffs on exports can benefit the world economy by promoting trade, stimulating growth, and fostering competition and innovation.
Step-by-step explanation:
To discuss the validity of Stieglitz's view that dropping subcharges and tariffs on exports will benefit the world economy, we need to understand the concepts of imports, exports, and exchange rates. Imports are goods and services brought into a country from another country, while exports are goods and services sold by a country to another country. Exchange rates determine the value of one currency in relation to another. When import tariffs and subcharges are dropped, it can lead to several potential benefits for the world economy:
- Increased trade: Dropping tariffs and subcharges on exports can promote international trade by reducing barriers and making products more affordable for consumers in other countries. This can result in increased export volumes and revenue for exporting countries.
- Economic growth: When trade barriers are lowered, it can lead to increased economic activity and growth. By allowing countries to focus on producing goods and services they are most efficient at, global production can be optimized, leading to improved living standards.
- Competition and innovation: Reduced trade restrictions encourage competition and innovation as companies strive to compete internationally. This can lead to improvements in product quality, cost-efficiency, and technological advancements.
Overall, dropping subcharges and tariffs on exports can have positive effects on the world economy by promoting trade, stimulating growth, and fostering competition and innovation.