Allowing free trade can lead to greater output because of:

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that countries should focus on producing goods and services that they are relatively more efficient at producing, and then trade with other countries to acquire other goods and services that they are relatively less efficient at producing. This leads to greater overall output because it allows countries to specialize in what they are good at, and to benefit from the specialization and productivity gains that come with it. The other choices are not directly related to the benefits of free trade.

Allowing Free Trade Can Lead to Greater Output Because Of