International trade increases competition, resulting in more efficient production and lower prices for consumers. Both trading partners can specialize in producing goods that they are comparatively more efficient in producing, leading to increased output and improved living standards for both nations. Therefore, both trading partners benefit from international trade.

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International Trade

Question 49

Multiple Choice

International trade:

A) makes both trading partners better off
B) makes one trading partner better off at the expense of the other
C) results in bad outcomes when there are shortages
D) is good for consumer goods, but we should not rely on other nations for our food supply

Correct Answer: