Asked by Scott Johnston on Jul 21, 2024
Verified
Nations can gain from trade with other nations,even if they are less productive in all industries than the nations with which they trade.
Gain From Trade
The advantage or improvement in outcome that countries or individuals achieve through the act of trading goods or services.
Productive
Refers to the effectiveness in producing a significant amount of output per unit of input.
Industries
Sectors of an economy that produce goods or provide services.
- Understand the positive outcomes of trading across borders, even if one nation holds a higher efficiency in production.
Verified Answer
LM
Lesley MartinezJul 23, 2024
Final Answer :
True
Explanation :
This statement is a core principle of international trade theory, known as comparative advantage. It suggests that even if a country is less efficient and productive in all industries compared to its trading partners, it can still benefit from specializing in industries in which it has a comparative advantage and then trading with other countries. This can increase overall global efficiency and welfare.
Learning Objectives
- Understand the positive outcomes of trading across borders, even if one nation holds a higher efficiency in production.
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