A nation will engage in voluntary trade if

Question

Quizplus · Accepted Answer

A nation will only engage in voluntary trade if it benefits them economically. If the exchange is mutually beneficial for both parties - such as if one country has a comparative advantage in producing certain goods, while the other has a comparative advantage in producing other goods - then both countries can gain from trade. However, if there are domestic costs associated with trade or the country lacks a comparative advantage in the production of every good, it may be less likely to engage in voluntary trade. The approval of the World Trade Center is not a determining factor in whether or not a nation will engage in voluntary trade.

A Nation Will Engage in Voluntary Trade If