If nations begin to specialize in production for the purpose of trade,what is the effect on total world output?

Question

Quizplus · Accepted Answer

Specialization leads to a more efficient use of resources and can result in an increase in productivity. As each nation focuses on producing goods and services it is comparatively better at, total world output will increase. This is because countries will be able to produce more with the same amount of resources, and they will be able to trade with other countries to obtain goods and services that they are not specialized in producing.

If Nations Begin to Specialize in Production for the Purpose