ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Only happens when Europe trades with the United States and Canada
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Happens when different countries choose to exchange goods with one another
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Happens when trade barriers prevent trading with China, India and Japan
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Happens when OPEC nations place an embargo with the United States and Canada
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Detailed explanation-1: -Voluntary trade ensures, at least in theory, that poorer nations have power and control over the products they buy and sell, keeping them from being exploited by more powerful nations.
Detailed explanation-2: -Foreign trade refers to the exchange of goods and services between different countries.
Detailed explanation-3: -Trade increases competition and lowers world prices, which provides benefits to consumers by raising the purchasing power of their own income, and leads a rise in consumer surplus. Trade also breaks down domestic monopolies, which face competition from more efficient foreign firms.
Detailed explanation-4: -Voluntary exchange is a type of transaction where two parties freely trade goods or services. This occurs in a market economy, which is a type of economy where both participants of an interaction gain a mutual benefit from it and are better off than when they started.