If two countries participate in free trade:

Question

Quizplus · Accepted Answer

Free trade benefits both countries as a whole by allowing each to specialize in producing goods or services that they have a comparative advantage in and then trading those goods or services with the other country. This leads to an increase in overall efficiency and productivity, allowing both countries to gain from the trade. However, there may be individual winners and losers within each country depending on their level of involvement in the particular industries affected by the trade.

If Two Countries Participate in Free Trade