Which of the following are two potential benefits for a country exporting goods like snowplows and sand to the Middle East?

• A. Increased foreign exchange earnings and access to new markets
• B. Reduced domestic employment and decreased production efficiency
• C. Lower transportation costs and higher import tariffs
• D. Decreased international relations and reduced product quality

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the context of the problem, which involves identifying benefits for a country exporting goods to a foreign market, specifically snowplows and sand to the Middle East.
2. Step 2: Recall that exporting goods typically leads to increased foreign exchange earnings because the country receives payment in foreign currency for its exports.
3. Step 3: Recognize that exporting also provides access to new markets, allowing producers to sell more goods beyond their domestic market, potentially increasing sales and profits.
4. Step 4: Evaluate the other options by considering whether they represent benefits or drawbacks. For example, reduced domestic employment and decreased production efficiency are generally negative outcomes, not benefits.
5. Step 5: Conclude that the two potential benefits for the exporting country are increased foreign exchange earnings and access to new markets, as these align with standard economic advantages of exporting.