ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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so they can specialize
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because they believe that the products they receive are worth more than the products they give up
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because they need to acquire certain raw materials
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all are correct
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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: -Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.
Detailed explanation-3: -Can countries benefit from trade even if they do not export much? Some countries realize economic growth not just from the export of their own products, but from providing logistics services to cargo from and to other countries. For example, Singapore, The Netherlands, and Belgium.
Detailed explanation-4: -International trade allows countries to expand their markets and access goods and services that otherwise may not have been available domestically. As a result of international trade, the market is more competitive. This ultimately results in more competitive pricing and brings a cheaper product home to the consumer.