Question

How does international trade lead to specialization?

A. Countries become more dependent on each other for buying and selling
manufactured goods.

B. Labor can be outsourced cheaply to other countries, which brings down production costs.

C. Countries can make the best use of resources by buying what they don’t have
from other nations

D. Industries begin to compete to offer the best prices and increase demand.

Answer 1

International trade leads to specialization as c. countries can make the best use of resources, outsource labor to other countries, and foster interdependence for buying and selling goods.

Step-by-step explanation:

International trade leads to specialization through various mechanisms. Firstly, countries can make the best use of resources by buying what they don’t have from other nations. For example, a country with abundant natural resources but lacking in manufacturing capabilities can specialize in extracting and exporting resources while importing manufactured goods. Secondly, labor can be outsourced cheaply to other countries through international trade, which brings down production costs and allows for specialization in certain industries. Finally, international trade fosters interdependence between countries, making them more dependent on each other for buying and selling goods, leading to specialization in specific industries.