Consider these possible effects of growth in the booming export sector: I. It reduces the price of foreign exchange. II. It slows other sectors’ growth by reducing incentives to export other goods. III. It reduces incentives to substitute domestic goods for imports. IV. It raises factor and input prices for non-booming sectors. Which of them does Michael Roemer’s three-sector model identify?

1. A Option A: I and III only
2. B Option B: I, II and III only
3. C Option C: II and III only
4. D Option D: I, II, III and IV

Answer checked 11 October 2026 · How we write and check questions