When an economist says that a country can experience gains from trade, this means it can:
A) consume at a point outside its production possibilities frontier.
B) increase its exports.
C) increase the efficiency of its production.
D) experience a bowed-out production possibilities frontier.

Question

Quizplus · Accepted Answer

Gains from trade refer to the benefits a country can receive by engaging in trade with other countries. By specializing in the production of goods or services in which it has a comparative advantage, a country can increase its overall production and consumption possibilities, allowing it to consume at a point outside its production possibilities frontier.

When an Economist Says That a Country Can Experience Gains