In addition, international trade helps U.S. households' budgets go further. Because our trading partners also specialize in the goods and services for which they are relatively more productive, the prices of those goods and services in the United States are lower than if we could only consume what we produce. Trade also offers a much greater diversity of consumption opportunities, from year-round fresh fruit to affordable clothing. "The Economic Benefits of US.Trade," 2015 The White House to increase the variety of goods each country produces, while making prices high for consumers to maximize each country's productivity strengths, while lowering prices on what they import to encourage countries to produce only what they need while increasing prices on exports to reduce each country's productivity while minimizing prices for consumers

Question

In addition, international trade helps U.S. households' budgets go further. Because our trading partners also specialize in the goods and services for which they are relatively more productive, the prices of those goods and services in the United States are lower than if we could only consume what we produce. Trade also offers a much greater diversity of consumption opportunities, from year-round fresh fruit to affordable clothing. "The Economic Benefits of US.Trade," 2015 The White House to increase the variety of goods each country produces, while making prices high for consumers to maximize each country's productivity strengths, while lowering prices on what they import to encourage countries to produce only what they need while increasing prices on exports to reduce each country's productivity while minimizing prices for consumers

Answer 1

The principle discussed in the paragraph is the "Law of Comparative Advantage" in economics, which dictates that each nation should specialize in what it can produce most efficiently and exchange its goods and services for those it needs. The options refer to different economic ideas. Analyzing for correlation to the extract, option A seems to present opposite ideas, stating increased output variety and high consumer prices, which is contrary to the benefits of trade explained. Option C describes self-sufficiency which isn't the context. Option D employs but misrepresents the idea of 'Productivity' — reducing productivity definitely doesn't correlate with the benefits espoused in the excerpt. Importantly, option B captures the principle accurately: As each country emphasizes and leverages areas they are naturally more productive in, it results in lower prices.'''

Question

Answer

Answer

Explanation