The gains from trade
A)are likely realized in the long run when workers and firms have had the time to adjust to the new competitive environment.
B)are immediately realized in the short run,when governments drop protectionist policies.
C)are smaller than the costs of adjustment.
D)none of the options

Question

Quizplus · Accepted Answer

The gains from trade may take time to be realized, as workers and firms adjust to new competitive environments. For example, a country that specializes in producing and exporting certain goods may need to retrain workers or invest in new equipment to become more efficient in producing those goods. This adjustment process can take time but eventually leads to increased productivity and overall gains from trade.

The Gains from Trade