In the Linder theory of trade, a country sends goods to other countries which __________, and the greatest trade of a country is expected to be with countries which have per capita income levels __________ that of the original country.

Question

Quizplus · Accepted Answer

According to the Linder theory of trade, a country tends to produce and export goods for which it has a similarity in demand with other countries. Therefore, the receiving countries are also likely to produce those goods. Additionally, the theory suggests that a country will have the highest trade with countries that have a similar income level, indicating a similar demand for goods.

In the Linder Theory of Trade, a Country Sends Goods