Question

why does mutual gains must exist from trade. explain reasoning

why does mutual gains must exist from trade. explain reasoning

Homework Answers

Answer #1

Answer : Mutual gain has been exist with an international trade to both of the countries.Trade helps in various ways as follows:

  • Trade encourages in producing those good in which the country has been specialised which resulted in proper utilisation of the resources.
  • Trade increases competition in both the countries and lower the product price.
  • Trade break up domestic monopolies in the country.
  • Comparative advantage of trade help both country such as Producer country increases their production and achived Economic of scale where as another country achived their other production goods from the market.
  • Transfer of technology between the countries has been existed.
  • Increases competition and more job created in a whole economy.
  • More job opportunity as well as Specialisation of product has been given utmost importance.
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