Countries engaged in international trade specialize in production based on group of answer choices comparative advantage. relative inflation rates. relative levels of gdp. relative exchange rates.

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Answer is comparative advantage.

The capacity to create the goods and the services at a lower opportunity cost, rather than necessarily at the  higher volume or the quality, is referred to as the comparative advantage. Comparative advantage is an important discovery that commerce will continue even if one country has an absolute edge in all items.

When a country provides an item or service with the lowest opportunity cost, it is considered to have a comparative advantage. In a comparative advantage situation, opportunity cost is the loss of the one product when creating the other.

Therefore, international trade specialized in production based on the comparative advantage.

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