Question

Despite trade restrictions, international business is a. struggling for survival. b. decreasing. c. slowing down. d. moving slowly. e. growing.

Answer 1

Answer:

The answer is e. growing

Explanation:

The reason international business will continue to grow is because no nation can meet all its needs by itself. There will always be importation and exportation. This is where Comparative Advantage comes in.

What is comparative advantage?

• Simply put, this is the ability of a company or an economy to produce and sell goods and services at a lower price than its competitors, and still realize a larger sales margin. This theory was introduced by the English political economist David Ricardo in 1817.

Another reason why international trade will continue to grow is because of Absolute Advantage.

• Absolute advantage refers to the ability of an economy or a company to produce more or better goods and services than its others.

Let us assume that country A cannot produce its own oil, but country B can. In this scenario, country B has Absolute advantage over country A, therefore country A will naturally import oil from country B regardless of whether there are trade restrictions between them. This is because country A must fulfill its oil needs whether it likes it or not.