The gains from international trade are closely related to ?
Correct answer: B. How much the autarky price differs from international terms of trade change
- A. The labor theory of value
- B. How much the autarky price differs from international terms of trade change
- C. The fact that a country must lose from trade
- D. All of the above
Explanation
Trade gains are linked to the difference between a country's autarky opportunity-cost price and the international terms of trade. The larger the favourable difference, subject to trade being possible, the greater the potential gain from specialization and exchange.
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