Which of the following statements is true?

Question

Quizplus · Accepted Answer

A self-sufficient country relies only on its own resources and production capabilities, which means that it can consume only what it produces. Therefore, it can at best consume on its production possibilities frontier, which represents the maximum amount of goods and services that can be produced with the available resources and technology. Choosing option B is incorrect because even if a country does not have an absolute advantage in producing all goods, it can still benefit from trade by specializing in the production of goods in which it has a comparative advantage. Option C is also incorrect because, as stated earlier, a self-sufficient country cannot consume outside its production possibilities frontier. Finally, option D is incorrect because history has shown that countries that embrace trade and specialization tend to achieve greater prosperity than those that are self-sufficient.

Which of the Following Statements Is True