ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Producing all goods and services needed for a country’s growth, so that trade with other countries is not needed.
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Producing those goods a country can make easily so they can trade them for goods made by others that cannot be produced locally
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Directly swapping goods from one country to another withouthaving to use money
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Trying to avoid investing in industry and technology because ofthe expense involved.
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Detailed explanation-1: -Specialization in economics is the process of an organization concentrating its labor and resources on a certain type of production to be more efficient and create a comparative advantage for an economy.
Detailed explanation-2: -Trade refers to the voluntary exchange of goods or services between economic actors. Since transactions are consensual, trade is generally considered to benefit both parties. In finance, trading refers to purchasing and selling securities or other assets.
Detailed explanation-3: -Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. Comparative advantage is used to explain why companies, countries, or individuals can benefit from trade.
Detailed explanation-4: -Absolute Advantage is the country’s inherent ability that allows that country to produce specific goods efficiently and effectively at a relatively lower marginal cost.