Over time, international trade enables an economy to:

Question

Quizplus · Accepted Answer

International trade allows a country to specialize in producing goods in which it has a comparative advantage, allowing it to consume more than it could produce on its own. This leads to smoothing consumption over time, as the country can import goods in times of low production and export goods in times of high production. However, running a trade deficit or surplus forever is not sustainable and would eventually lead to negative economic consequences. Variation in consumption is a natural outcome of economic cycles and is not solely caused by international trade.

Over Time, International Trade Enables an Economy To