ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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False
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True
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Either A or B
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None of the above
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Detailed explanation-1: -The five main reasons international trade takes place are differences in technology, differences in resource endowments, differences in demand, the presence of economies of scale, and the presence of government policies. Each model of trade generally includes just one motivation for trade.
Detailed explanation-2: -Trade is an engine of growth that creates jobs, reduces poverty and increases economic opportunity. The World Bank Group helps its client countries improve their access to developed country markets and enhance their participation in the world economy.
Detailed explanation-3: -Ricardo’s argument is that if protection is removed, resources would be expected to move away from high cost to low cost products and as a result productivity would rise. His comparative advantage theory advocating in favour of a free trade model is part of the argument implied generally to defend laissez faire.