While international trade will benefit both the importing and exporting country in a two-country world, the gains from trade in the exporting country must be greater than the gains from trade in the importing country.

Question

Quizplus · Accepted Answer

The theory of comparative advantage suggests that both countries can benefit from trade, but it does not specify that the gains from trade must be greater for the exporting country than for the importing country. The distribution of gains depends on various factors, including the terms of trade, and both countries can potentially benefit equally or one may benefit more than the other, but there's no rule that the exporting country benefits more.

While International Trade Will Benefit Both the Importing and Exporting