As international trade proceeds, a country will produce more of its import- competing product.

Question

Quizplus · Accepted Answer

The statement is a generalization and therefore not always true. International trade can lead to specialization in the production of goods and services where a country has a comparative advantage, leading to an increase in overall production and economic welfare. It is not necessarily the case that a country will produce more of its import-competing product.

As International Trade Proceeds, a Country Will Produce More of Its