Should international transportation costs decrease the effect on international trade would include a (an) ?
Correct answer: A. increase in the volume of trade
- A. increase in the volume of trade
- B. Smaller gain from trade
- C. Decline in the income of home producers
- D. Decrease in the level of specialization in production
Explanation
Lower transport costs make international exchange cheaper, allowing countries to trade more and specialize more fully according to comparative advantage. The usual result is an increase in the volume of trade.
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