Since production has shifted to more efficient producers due to comparative advantage, consumers in Country X have had access to more goods at lower prices.Which of the following most likely exists?
A)trade specialization
B)trade diversion
C)trade creation
D)trade internalization

Question

Quizplus · Accepted Answer

The scenario described is indicative of trade creation. Trade creation occurs when the elimination of trade barriers leads to the production of a good by a more efficient producer, resulting in lower prices and increased imports from that producer. Therefore, the increased access to goods at lower prices in Country X suggests that trade creation has taken place.

Since Production Has Shifted to More Efficient Producers Due to Comparative