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Question: 1 / 275

How can specialisation enhance a country's international trade?

By reducing the number of exported goods

By producing goods in which the country has a comparative advantage

Specialisation enhances a country's international trade primarily by enabling it to produce goods and services in which it has a comparative advantage. When a country concentrates its resources and efforts on the production of specific goods that it can manufacture more efficiently or at a lower opportunity cost than other countries, it can produce higher quantities and better quality products. This specialization allows the country to become more competitive in international markets.

As a result of this efficiency, the specialized country can trade for other goods that it does not produce as effectively, leading to a situation where both trading partners benefit from improved overall consumption opportunities. This process not only enhances international trade but also encourages economic growth, as countries engage in more productive activities and leverage their strengths in global markets. The comparative advantage principle illustrates how trade can be mutually beneficial, as countries exchange their specialized products for those they need, ultimately leading to an increase in international trade volume.

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By focusing solely on domestic consumption

By limiting exports to local markets

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