Specialization according to the principle of comparative advantage
A)shifts outward the world's PPC.
B)benefits productive countries but harms less productive ones.
C)benefits less productive countries and harms more productive ones.
D)moves the world closer to its PPC.

Question

Quizplus · Accepted Answer

Specialization according to the principle of comparative advantage allows countries to produce the goods and services that they have a comparative advantage in, and trade with other countries to obtain the goods and services that they are less efficient at producing. This leads to an increase in efficiency and productivity, which shifts outward the world's production possibilities frontier (PPC) and moves the world closer to its PPC. Therefore, the correct answer is choice D.

Specialization According to the Principle of Comparative Advantage