Which of the following statements is true?

Question

Quizplus · Accepted Answer

Specialization and trade along the lines of comparative advantage allow nations to consume more than if they were to produce just for themselves, as each country specializes in producing the goods and services for which they have a comparative advantage and trade with each other. This leads to increased efficiency and overall prosperity for all nations involved. Option B is incorrect because free trade theory suggests that all nations can benefit from trade, not just one at the expense of another. Option C is incorrect because the theory of comparative advantage suggests that a nation should specialize in the production of those goods for which it has a comparative advantage, not an absolute advantage.

Which of the Following Statements Is True