Question

Which of the following is NOT a positive affects of a nation comparative advantage on international trade?

Answer 1

Answer: D) eliminates the need for trade with other nations

Explanation:

Having comparative advantage on the production of a good or service means that a country can produce that good or service cheaper and be able to exchange it for other goods and services that other countries are offering.

International trade is therefore very important to countries acting on comparative advantage because the country will not produce all that it needs but rather what it is good at producing. This means that trade with other countries is still needed to provide those goods that they need but find it expensive to produce.