Trade among nations is ultimately based on:

Question

Quizplus · Accepted Answer

Trade among nations is ultimately based on comparative advantage. This means that countries specialize in producing goods and services that they can produce efficiently and at a lower opportunity cost than other countries. By trading with other countries, both parties can benefit through increased efficiency and access to a wider variety of goods and services. Absolute advantage and exploitation are outdated and inaccurate views of international trade, and international trade treaties are an important tool for facilitating trade but are not the ultimate basis for trade.

Trade Among Nations Is Ultimately Based On