Suppose that international trade results in an outward shift in a country's production possibilities curve.This would be described as
A) dynamic gains from trade
B) static gains from trade
C) protectionist gains from trade
D) allocative gains from trade

Question

Quizplus · Accepted Answer

The outward shift in the country's production possibilities curve indicates an increase in its productive capacity due to international trade, which is known as dynamic gains from trade. Static gains from trade refer to the benefits of trade resulting from the efficient allocation of resources, while protectionist gains from trade are a false concept that suggests protectionism can lead to benefits for a country. Allocative gains from trade refer to the ability to consume goods at a lower opportunity cost, but do not necessarily result in an outward shift in the production possibilities curve.

Suppose That International Trade Results in an Outward Shift in a Country's