Which of the following is correct?
A)trade allows for specialisation
B)trade is good for some nations only
C)trade is based on absolute advantage
D)trade allows countries to consume inside their production possibilities curve

Question

Quizplus · Accepted Answer

Trade allows for specialisation, as different countries have different comparative advantages in producing certain goods or services. By specializing in the production of goods and services in which they have a comparative advantage, countries are able to increase overall productivity and efficiency, leading to increased economic growth and improved living standards. Furthermore, trade allows countries to access goods and services that they may not be able to produce domestically, leading to increased consumer choice and welfare.

Which of the Following Is Correct