Final answer:
False. Trade can still benefit a nation even if it doesn't have an absolute advantage in the production of a good due to comparative advantage.
Step-by-step explanation:
False. Trade can still benefit a nation even if it doesn't have an absolute advantage in the production of a good.
Even when a country has high levels of productivity in all goods, it can still benefit from trade due to comparative advantage. Comparative advantage refers to a country being able to produce a good at a lower opportunity cost compared to other countries. By specializing in goods where they have a comparative advantage, countries can increase their overall production and benefit from trade.
For example, even if a high-income country has an absolute advantage in all products due to factors like well-educated workers and advanced technology, it can still benefit from trade by focusing on the goods where it has a comparative advantage, while other countries specialize in their own areas of comparative advantage.