The comparative advantage stems from the ability to produce goods and services at low opportunity costs, which is influenced by how available economic resources (also called factors of production) are and how good their quality is. For
International Economy
Closed Economy: Meaning, Implications, Pros, and Cons
What's it: A closed economy is an economy without transactions with other countries. To grow the economy, it relies on household consumption, business investment, and government spending. It is impossible to find countries that adopt a closed
Comparative Advantage: Meaning, Assumptions, Examples, Criticisms
What's it: Comparative advantage is a favorable position arising from producing goods and services at a lower opportunity cost. This concept is important in explaining international trade and specialization in production. That answers why
International Trade: Why It Matters, Advantages, Disadvantages
What's it: International trade refers to trade of goods and services across countries. It consists of exports and imports. Export means you sell domestic goods and services to consumers abroad. Conversely, imports are when you buy goods and services