Trade allows a country to consume outside its production possibilities frontier.

Question

Quizplus · Accepted Answer

Trade enables a country to specialize in the production of goods and services in which it has a comparative advantage and then trade for other goods and services. This specialization and trade allow for consumption levels that can exceed what the country could achieve by itself without trade, effectively allowing it to consume outside its production possibilities frontier.

Trade Allows a Country to Consume Outside Its Production Possibilities