Chapter

3.2. Why Nations Trade*

From IntroductionToBusiness OP 8D04gAa

Concepts

1. Why do nations trade and specialize?

   "One might argue that the best way to protect workers and the domestic economy is to stop trade with other nations. Then the whole circular flow of inputs and outputs would stay within our borders. Bu

2. How does comparative advantage encourage free trade?

   "Even if the United States had an absolute advantage in both coffee and air traffic control systems, it should still specialize and engage in trade. Why? The reason is the principle of comparative adv

3. Why do people fear trade and globalization?

   "The continued protests during meetings of the World Trade Organization and the protests during the convocations of the World Bank and the International Monetary Fund (the three organizations are disc