Question

Trade between two nations is mutually beneficial if each specializes in the good in which it has a comparative advantage?

Answer 1

Answer:

The trade between two nations is mutually beneficial if each specializes in the good in which it has a comparative advantage is a TRUE statement.

Explanation:

• If a raw material that is needed for the production of a specific commodity is available in abundance within the domestic boundaries of a country, the production of that particular commodity becomes way more economical for the country more than any other country.

• Trading in such a commodity with another countries, gives the producing country a competitive advantage as it fetches more profit through the trade of such commodities.