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8 October, 20:38

Trade between countries tends to Group of answer choices

1. reduce both competition and specialization.

2. reduce competition and increase specialization.

3. increase competition and reduce specialization.

4. increase both competition and specialization.

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Answers (1)
  1. 8 October, 20:53
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    Option (d) is correct.

    Explanation:

    Trade between the nations will result in an increase in both competition and specialization.

    When the trade among the nations increases then as a result competition increases because consumers have more number choices due to imported products from the other nations. This will increase the competition.

    We know that the trade is largely based on the comparative advantage. The countries exporting the product in which it has a comparative advantage and importing the products in which it has a comparative disadvantage. This will increase the specialization in the production of certain goods.
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