Question

International trade:Question 20 options:a) reduces resource consumption.b) increases consumption possibilities.c) increases consumer prices.d) reduces production possibilities.

Answer 1

Option B, increases consumption possibilities.

Step-by-step explanation:

Trade increases the amount of goods that are available for each country to consume. The consumption possibilities point of an economy is derived from its opportunities of international trade, production capacity and consumer behavior.

International trade increases competition in the market which ultimately leads to lower prices of commodities. It provides the consumers the purchasing power capacity of their own income, and leads a rise in consumer surplus and consumption.