Which of the Following Statements Describes Reasons Why Free Trade

question 88

Multiple Choice

Which of the following statements describes reasons why free trade is beneficial for the United States?

• A) Free trade increases consumer surplus for imported goods that are cheaper than U.S. goods.
• B) Free trade directs U.S. resources to those goods and services for which the United States has a comparative advantage.
• C) Through specialization, the United States and its trading partners can use the same overall amount of resources to produce and consume a larger amount of goods.
• D) All of the statements are correct.

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Definitions:

Social Factors

External societal influences that affect an individual's behavior, attitudes, and life chances.

Incentive

A factor, often a reward or punishment, that motivates behavior or increases the likelihood of a certain response.

Biological Needs

Biological needs are the essential requirements that organisms must meet to maintain life, such as food, water, air, and shelter.

Social Needs

The human requirements for companionship, belonging, inclusion, and being part of a community.