Question

In: Economics

True / False / Explain: The costs of international trade can outweigh the benefits.

True / False / Explain: The costs of international trade can outweigh the benefits.

Solutions

Expert Solution

Correct option is: False

International trade refers to the process which involves exchange of goods & services between countries. The process involves selling goods & services & buying goods & services from other countries. International trade has more benefits than costs for economies. It is based on the principle of comparative advantage, i.e., every country has the capability of producing some goods cheaper than other countries. So, the country produces that good at cheapest possible cost & uses the excess production of that good for exporting to other countries which causes money to come into the country when goods are sold to other nations. So, there are various benefits related with international trade like it promotes efficiency in production, leads to efficient & better allocation of resources, utilization of surplus production, generates employment, it makes variety of goods available for consumption, better quality & low costs of goods, helps to gain a global market share, enables technological interflow, etc. So, international trade provides many benefits to the consumers, producers as well as to the workers of an economy.


Related Solutions

Explicate four benefits and costs of government intervention in international trade
Explicate four benefits and costs of government intervention in international trade
hich of the following is TRUE regarding international trade? Trade benefits everyone compared to autarky A...
hich of the following is TRUE regarding international trade? Trade benefits everyone compared to autarky A country will prefer autarky if it has absolute advantage in producing every good Trade benefits occur through a rise in real wages None of the above 6.Sunshine Smoothies imports $5,000 of mangoes and buys $5,000 of strawberries from local farmers. It pays $1,000 in wages and $1,000 in rent. It sells $8,000 worth of smoothies to local consumers and ships $5,000 of frozen smoothies...
Provide rationale and research support whether the benefits of free trade outweigh the drawbacks
Provide rationale and research support whether the benefits of free trade outweigh the drawbacks
In principle, the benefits of international trade to a country exceed the costs, no matter whether...
In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent the losses?
Economists seem convinced that overall effect of trade between countries is positive, that the benefits outweigh...
Economists seem convinced that overall effect of trade between countries is positive, that the benefits outweigh the costs. And yet many groups continue to effectively lobby for protection for their industries and surveys suggest that the majority of voters consider trade to be harmful. The writings of Frederic Bastiat provide simple but logical examples in an attempt to demonstrate the absurdity of protectionist policies. Yet most people probably have never heard of Bastiat and have probably never heard the arguments...
Most people conclude that the costs outweigh the benefits of a robbery. Yet some willingly engage...
Most people conclude that the costs outweigh the benefits of a robbery. Yet some willingly engage in such activity. Are they miscalculating, or do they value costs and benefits differently? Explain. What does this tell us about cost-benefit analysis?
Absolute and advantage theory forms the basis for international trade except during crisis - True False...
Absolute and advantage theory forms the basis for international trade except during crisis - True False COVID19 is an economic crisis for some economies of the world Question - True False International economics is a field of study which assesses the implications of international trade in goods and services and international investment - True False Exchange rates hardly impact the US trade with other countries - True False USA has unfavorable balance of trade Question 18 options: True False )...
True or False? Explain. 1.     T / F         Trade discrimination is bad in the sense...
True or False? Explain. 1.     T / F         Trade discrimination is bad in the sense that separate deals with separate nations may destroy many of the gains from global markets. 2.     T / F         The formation of a customs union will definitely raise welfare. 3.     T / F         The less elastic the import demand curve, the greater the gains from a customs union. 4.     T / F         Customs unions are more likely to be successful among...
True or False. Indicate whether the statement is true or false. If false, explain in the...
True or False. Indicate whether the statement is true or false. If false, explain in the space provided the statement why it is false, or simply correct the statement. Smooth muscle contraction is regulated by the autonomic nervous system. During exercise, the sympathetic nerves that innervate the smooth muscles of bronchioles and arterioles regulate the contraction of these smooth muscles to increase ventilation and cardiac output. 2. Multiple choice: Choose one best statement. An infant born prematurely has neonatal respiratory...
True or False: A country can maximize its gains from trade by producing at the autarkic...
True or False: A country can maximize its gains from trade by producing at the autarkic equilibrium and trading at the relative world price. Justify your answer and explain with the help of a properly labelled graph.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT