In terms of a nation's production possibilities frontier,what impact does international trade have?
A) International trade shifts the nation's production possibilities frontier outward.
B) International trade shifts the nation's production possibilities frontier inward.
C) International trade allows the nation to consume at a point outside its production possibilities frontier.
D) International trade shifts the production possibilities frontier outward for the goods that are exported and inward for the goods that are imported.
E) International trade shifts the production possibilities frontier outward for the goods that are imported and inward for the goods that are exported.

Question

Quizplus · Accepted Answer

International trade allows a nation to consume more than it can produce on its own, effectively enabling consumption at points beyond its production possibilities frontier. This is because it can specialize in producing goods for which it has a comparative advantage and trade for other goods.

In Terms of a Nation's Production Possibilities Frontier,what Impact Does