Asked by Joshua Waterman on Jun 15, 2024
Verified
Countries engaged in international trade specialize in production based on
A) relative levels of GDP.
B) comparative advantage.
C) relative exchange rates.
D) relative inflation rates.
Comparative Advantage
A person's, corporation's, or country's capability to offer a good or service more efficiently, incurring less opportunity cost than their competitors.
International Trade
The exchange of goods and services between countries, allowing countries to expand their markets and pursue higher efficiency through specialization.
Relative Levels
An assessment of values or quantities in comparison to one another.
- Learn about the fundamental tenets of international trade and the notion of comparative advantage.
Verified Answer
JP
Joaquinsito ParialJun 16, 2024
Final Answer :
B
Explanation :
Countries specialize in production based on comparative advantage, which means they produce goods or services at a lower opportunity cost than others, allowing them to trade effectively on the international market.
Learning Objectives
- Learn about the fundamental tenets of international trade and the notion of comparative advantage.