What are the benefits and costs to a nation that participates in international trade? Do the benefits outweigh the costs or do the costs outweigh the benefits?
What will be an ideal response?
The benefits to a nation of specializing and trading with other nations along the lines of comparative advantage are the higher average absolute standards of living its people are able to enjoy. Prices are generally lower and there are a wider variety of more and higher quality products to consume. The costs to a nation include the loss of some businesses and some jobs. The evidence is clear that the benefits far outweigh the costs for a nation. This is why so many nations want to increase their participation in the global economy.
You might also like to view...
The production possibilities curve for two products is bowed out because
A) as the production of a good increases, opportunity cost increases. B) as the production of a good increases, opportunity cost is unchanged. C) the qualities of the resources are not identical. D) there are unemployed resources.
Good current economic conditions incent people to save _______, and a good outlook on future economic conditions incent people to save _________.
A. more; less B. more; more C. less; more D. less; less
The extra production gained by employing one more worker is called the:
A. marginal product. B. nominal wage. C. surplus product. D. real wage.
Suppose Political Party A proposes a tax cut on business income to stimulate the economy. Political Party B opposes the tax cut on business income asserting that it would only help businesses, not the average working man and woman. If you were hired as
an economist for Political Party A, explain how the tax cut on business income would help the average working man and woman. What will be an ideal response?