The dynamic gains from trade include all of the following EXCEPT
A) economies of large-scale production resulting in decreasing unit cost.
B) increased saving and investment resulting in economic growth.
C) increased competition resulting in lower prices and wider range of output.
D) increasing comparative advantage leading to specialization.

Question

Quizplus · Accepted Answer

Dynamic gains from trade refer to the long-term benefits that countries experience from engaging in international trade, such as economies of scale, increased investment, and enhanced competition. However, increasing comparative advantage is not considered a dynamic gain from trade. Comparative advantage is a concept that explains why trade occurs, based on the pre-existing conditions in each trading nation, rather than a benefit that accrues over time due to trade.

The Dynamic Gains from Trade Include All of the Following