Autarky refers to a situation where a country does not engage in international trade, i.e. it is self-sufficient. In such a situation, a country can only consume goods that it is capable of producing itself using its available resources. Therefore, each country's consumption possibilities are limited to its production possibilities.

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In Autarky

Question 21

Multiple Choice

In autarky,

A) each country's consumption possibilities are the same as its production possibilities
B) equilibrium is attained with the maximum gains from specialization and trade
C) equilibrium is attained with the maximum amount of international trade
D) a nation has such a high standard of living that there are technically no poor people
E) a nation is governed by an individual with absolute authority

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