ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Greater ability to acquire required production resources – free trade (no trade barriers) allows producers who require for example, raw materials, to acquire them easier and at a lower cost. That lowers production costs, increases efficiency.

Detailed explanation-2: -True. Trade is the buying and selling of goods and services.

Detailed explanation-3: -Trade is essential for keeping a competitive global economy and lowers the prices of goods internationally as it spurs innovation and encourages markets to become specialised. The ability to trade also allows access to goods and services that might be of higher quality and lower cost than its domestic alternative.

Detailed explanation-4: -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.