Question

What a nation specializes in producing has much to do with its resources.
true or false

Answer 1

Generally speaking, yes, it is true that what a nation specializes in producing has much to do with its resources, although to a lesser extent now in the age of globalization. 

Answer 2

The correct answer is TRUE.

A nation specializes in the production of a good or service in which it has a comparative advantage, which means that the country is relatively more efficient in the manufacturing of such product than other countries.

Efficiency in production in this scenario is closely related with the endownment of resources of each country. A country is typically more efficient in producing goods and services that require resources that it owns, rather than resources that it needs to purchase abroad.