The basic proposition in international trade is that
A) trade is determined by absolute advantage.
B) in the long run, imports are paid for by exports.
C) everyone is made better off by free trade.
D) fair trade is more important than free trade.

Question

Quizplus · Accepted Answer

The basic proposition in international trade is that in the long run, imports are paid for by exports. This is known as the principle of balance of trade, which states that a country's imports and exports should be equal in the long run for a healthy economy. It is not based on absolute advantage or fair trade, and while free trade is generally beneficial, it may not necessarily make everyone better off.

The Basic Proposition in International Trade Is That