Trade can be beneficial to an economy because:
A) it results in a more efficient use of the combined resources of some of the trading countries, even though it reduces efficiency in others.
B) more goods and services can be obtained at lower opportunity cost.
C) it prevents specialization in those activities in which countries have a comparative advantage.
D) It prevents unemployment.

Question

Quizplus · Accepted Answer

Trade allows countries to specialize in the production of goods and services in which they have a comparative advantage. This leads to a more efficient allocation of resources, allowing more goods and services to be produced at a lower opportunity cost. Additionally, trade can stimulate economic growth and create jobs, but it does not necessarily prevent unemployment.

Trade Can Be Beneficial to an Economy Because