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Key Factors in Assessing International Trade Benefits
Chapter 1, Problem 5(choose chapter or problem)
International trade benefits a nation when
a. its revenue from selling abroad exceeds its outlays from buying abroad.
b. its trading partners experience reduced economic well-being.
c. all nations are specializing in producing what they do best.
d. no domestic jobs are lost because of trade.
Questions & Answers
QUESTION:
International trade benefits a nation when
a. its revenue from selling abroad exceeds its outlays from buying abroad.
b. its trading partners experience reduced economic well-being.
c. all nations are specializing in producing what they do best.
d. no domestic jobs are lost because of trade.
ANSWER:Step 1 of 2
International trade can be mutually beneficial for nations when they engage in specialization and trade based on comparative advantage. Each country focuses on producing goods and services in which it has a comparative advantage, meaning it can produce them at a lower opportunity cost compared to other countries. By specializing in the production of certain goods and services, countries can achieve higher levels of efficiency and productivity.
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Key Factors in Assessing International Trade Benefits
Want To Learn More? To watch the entire video and ALL of the videos in the series:
This video delves into the advantages of international trade, using the example of France's specialization in wine production, and explores different options while highlighting the concept of comparative advantage without revealing the ultimate answer.