Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
Let's break down why this is correct
Answer
The statement is false. Even if a country has a comparative advantage in a good, it may still import that good if domestic demand exceeds its production or if it needs a different quality or variety that it cannot produce efficiently. Trade can also be influenced by policy, tariffs, or strategic reasons, so a country might choose to import a good it can produce at a higher cost. For example, a country that grows rice cheaply could still import rice during a drought when its own harvest is low. Thus, specialization does not guarantee exclusive export and no import of that good.
Detailed Explanation
When a country can make a product much more cheaply, it tends to sell that product to other nations. Other options are incorrect because Some think that being good at a product means a country will never need it again.
Key Concepts
Comparative advantage
Specialization
Trade dynamics
Topic
Specialization and Trade
Difficulty
medium level question
Cognitive Level
understand
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