Product _______ may create _______ trade between countries, particularly in those with similar relative factor endowments.

Question

Quizplus · Accepted Answer

Product differentiation can create two-way trade between countries because each country can specialize in producing goods that are unique to their relative factor endowments and trade with each other. Homogeneity would not create any trade as there would be no reason for countries to trade similar products. Liability does not fit the sentence and one-way differentiation does not fully capture the potential for trade between countries.

Product _______ May Create _______ Trade Between Countries, Particularly in Those

Product _ May Create _ Trade Between Countries, Particularly in Those