If the nation of Alphania enjoys an increase in consumption as a result of specialization and trade, then it can be concluded that:
A) it has no trade barriers in any sector.
B) it has a comparative advantage in the production of all goods.
C) the country has a high level of inﬂation.
D) it has experienced the gains from trade.

Question

Quizplus · Accepted Answer

Specialization and trade allow countries to focus on producing goods in which they have a comparative advantage, leading to more efficient production and increased overall consumption. This is known as experiencing the gains from trade.

If the Nation of Alphania Enjoys an Increase in Consumption