5. International trade a. lowers the standard of living in all trading countries. b. leaves the...
a. lowers the standard of living in all trading countries.
b. leaves the standard of living unchanged.
c. raises the standard of living for importing countries and lowers it for exporting countries.
d. can raise the standard of living in all trading countries.
Homework Answers
This is because of comparative advantage. Even if a country has absolute advantage over another, both countries still can benefit through specialization.
If you need an example of comparative advantage, a great example can be found on wikipedia (look at example 2): http://en.wikipedia.org/wiki/Comparative_advantage
If you want more detail on comparative advantage, please message me. Not sure whether you understand the question already based on my brief explanation.
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