Suppose that with international trade now a possibility, two trading nations restructure their production from both having produced clothes and food to one producing clothes and the other producing food. What gains do they experience? What problems may they experience?
A) Gains are higher labor productivity and greater total output. Problems may be economic inefficiency.
B) Gains are economic efficiency. Problems may be trade wars.
C) Gains are people in both nations having higher incomes. Problems may be that the nations cannot find an acceptable trading price between food and clothes.
D) Gains are higher labor productivity and greater total output. Problems may arise from dependence on the other for vital goods.
E) Gains are economic efficiency. There are no problems as long as they engage in free trade.
Correct Answer:
Verified
Q130: Textile workers in the U.S. complain that
Q131: Which of the following is not used
Q132: The European Economic Community
A) is a good
Q133: The difference between a free trade area
Q134: The difference(s) between NAFTA and the EEC
Q136: Nations that cannot participate in international trade
Q137: If a nation's production possibilities curve is
Q138: Free trade means that nations can buy
Q139: Suppose that Burkina Faso, a nation in
Q140: What condition(s) must exist to make trade
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents