In terms of a nation's production possibilities frontier, what impact does international trade have?
A) International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods that are imported.
B) International trade shifts the nation's production possibilities frontier outward.
C) International trade shifts the nation's production possibilities frontier inward.
D) International trade shifts the production possibilities frontier outward for the goods that are imported and inward for the goods that are exported.
E) International trade allows the nation to consume at a point outside its production possibilities frontier.

Question

Quizplus · Accepted Answer

International trade allows a nation to consume beyond its production possibilities frontier by specializing in the production of goods where it has a comparative advantage and trading for other goods.

In Terms of a Nation's Production Possibilities Frontier, What Impact