If countries do not engage in international trade:
A) they give up the ability to specialize in production.
B) worldwide levels of production are lower.
C) the world will be operating inside its production possibilities curve.
D) all of the above are true.

Question

Quizplus · Accepted Answer

If countries do not engage in international trade, they give up the ability to specialize in production, worldwide levels of production are lower, and the world will be operating inside its production possibilities curve. All three are true because international trade allows countries to specialize in what they can produce most efficiently, increase their productivity, and achieve higher levels of output. By trading, countries can access a wider range of goods and services, increasing their consumption possibilities beyond what they can produce on their own.

If Countries Do Not Engage in International Trade