According to the theory of comparative advantage, countries and the world gain from trade because Exports give a country a political advantage over other countries that export less.
Trade is the voluntary exchange of goods or services between economic agents. Transactions are generally assumed to benefit both parties, as they are consensual. In finance, trading refers to the buying and selling of stocks and other assets.
Trade is central to ending global poverty. Countries open to international trade tend to grow faster, innovate, be more productive, and provide higher incomes and more opportunities for their people. Open trade also benefits low-income households by providing consumers with more affordable goods and services.
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According to the theory of comparative advantage, which of the following is not a reason why countries trade?
a. Comparative advantage.
b. Costs are higher in one country than in another.
c. Prices are lower in one country than in another.
d. The productivity of labor differs across countries and industries.
e. Exports give a country a political advantage over other countries that export less.
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