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

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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.

Rahul Sunny answered 1 year ago

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