When nations specialize according to their comparative advantage:

Question

Quizplus · Accepted Answer

When nations specialize according to their comparative advantage, total production and consumption in the world increase. This is because each country specializes in producing the goods and services that they can produce most efficiently, which leads to an increase in total global output. In turn, this increased output can be traded between countries, which leads to an increase in consumption as countries can access goods that they would not be able to produce as efficiently themselves.

When Nations Specialize According to Their Comparative Advantage