Question

An important insight of international trade theory is that when countries exchange goods and services one with the other, it A. is typically beneficial only to the low wage trade partner country. B. is typically harmful to the technology lagging country. C. is always beneficial to both countries. D. is usually beneficial to both countries. E. tends to create unemployment in both countries.

Answer 1

Answer:

Correct answer: letter c.

Explanation:

According to the theory of international trade the exchange of goods and services between countries is beneficial for both countries. Each country can specialize in producing what is most efficient and import products in which it is not productive. Thus, both countries will benefit from a greater supply of goods and services, greater competitiveness and, consequently, a lower price.