Classify each statement below as true or false by dragging i

Classify each statement below as true or false by dragging it into the corresponding box.

Solution

The option which are false includes the following:

1) wealthier countries always benefit more from international trade than the poorer

countries

2) countries trade for goods in which they do not have a comparative advantage and would therefore never trade with

nations that have comparative advantage

The options which are true are as follows:

1) through specialisation and trade it is possible for the country to consume a combination of good that is beyond its original production possibilities frontier.

2) When two countries choose to partake in international trade it is a mutually beneficial activity for both countries.