If trade opens up between the two formerly autarkic countries,Australia and Belgium,then
A) the real income of both countries may increase.
B) the real income of Australia and of Belgium will increase.
C) the real income of Australia but not of Belgium will increase.
D) the real income of neither country will increase.
E) the real income of both countries will increase.

Question

Quizplus · Accepted Answer

Trade allows countries to specialize in the production of goods where they have a comparative advantage, potentially increasing the real income of both countries, but it is not guaranteed.

If Trade Opens Up Between the Two Formerly Autarkic Countries,Australia