when two countries specialize and trade with one another
What is it called when a country trades with another country?
International Trade: Commerce among Nations.
Countries have a comparative advantage in producing certain goods due to the lower opportunity costs of producing one good over the others.
So, the country specializes in producing the good with a lower opportunity cost than other countries.
When would countries trade with each other?
Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants.
When two countries specialize in trade?
Specialization is good in trade because both nations entering into trade agreements can benefit.
Both nations not only save time and resources, but they will also be able to increase the overall output in their respective nations.
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Untitled
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