Which of the following statements is true?
A)Exports tend to decrease economic efficiency.
B)A nation should specialize in producing a good in which it has an absolute advantage.
C)A nation should specialize in producing a good only when it has both an absolute and a comparative advantage.
D)A nation should specialize in producing a good in which it has a comparative advantage.
E)International trade does not reflect the benefits of specialization.

Question

Quizplus · Accepted Answer

According to the theory of comparative advantage, a nation should specialize in producing a good in which it has a comparative advantage, meaning it can produce at a lower opportunity cost than other nations. This allows for efficient use of resources and increased economic welfare for all nations involved in international trade. Choices A, B, C, and E are all false statements.

Which of the Following Statements Is True