Question

True or False. Some economists argue that the single best thing that IACs could do for DVCs in terms of economic growth is to eliminate trade barriers between IACs and DVCs.

Short answer

The given statement is true.

Step-by-step solution

IACs ways of helping DVCs

IACs can assist in the development of DVCs in several ways, like providing them financial aid, direct aid, admitting migrant workers, and expanding trade.The increase in trade will help in the development of the nation. The removal of trade barriers will increase trade volume and elevate those nations by improving their national income.

Reason for the statement being true

Most of the DVCs are producers of raw materials, and hence they are dependent on foreign markets. If the trade barriers are high, they won’t be able to market their products, and the supply of finished goods will also be less. Lowering the trade barriers will encourage trade among countries and help in the economic growth of these DVCs by large capital flows.