Which of the following describes the reason for international trade
A. Balance of payment B. Comparative cost advantage C. Absolute cost advantage D. Balance of trade
Correct Answer: B
Explanation
Comparative advantage is an economic term that refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners. Countries mainly enter into international trade to buy goods and services that they would normally produce at a higher cost compared to buying it from another country that is producing it a relatively low cost
