Question

What happens when nations engage in trade?

O They don't need to specialize as much because they can buy so many products from other nations.
O It improves a nation's comparative advantage whenever nations engage in trade.
O They specialize in the things they do best, and exchange those products for the things other nations do best.

Answer 1

When nations engage in trade, they specialize in the things they do best and exchange those products for the things other nations do best. This allows nations to benefit from each other's comparative advantages and produce goods more efficiently, leading to increased economic growth and prosperity. By trading with each other, nations can also access a wider variety of goods and services than they would be able to produce on their own, leading to increased consumer choice and satisfaction. Therefore, the statement "They specialize in the things they do best, and exchange those products for the things other nations do best" is the most accurate description of what happens when nations engage in trade.

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