Final answer:
Gains from trade encompass the economic benefits attained through international trade, which include monetary gains, increased variety of products, enhanced competition, and transfer of knowledge and skills.
Step-by-step explanation:
When we refer to gains from trade, we are discussing the benefits that countries and their economies experience as a result of engaging in international trade. These gains are not just monetary but also include the transfer of knowledge, as well as increases in consumer choice and market competition. A gain of a few hundred billion dollars from trade is significant, and such gains tend to persist over time.
Furthermore, gains from trade may often be underestimated because many benefits are not easily quantifiable, such as the availability of varied products for consumers, increased competition among producers, and the transfer of skills in various sectors like production, technology, management, finance, and law.
It is also important to understand that the benefits of trade are foundational to economic principles such as comparative and absolute advantage, which further explain why countries choose to trade in the first place. Notably,