The theory of overlapping demands explains why trade often occurs between countries that have similar levels of per capita income.

Name: The theory of overlapping demands explains why trade often occurs between countries that have similar levels of per capita income.
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The theory of overlapping demands suggests that countries with similar levels of per capita income have similar consumer preferences, leading to trade between such countries as they demand similar goods and services.

The Theory of Overlapping Demands Explains Why Trade Often Occurs