Economics homework help?
Ok so I'm doing my economics homework and I'm really stuck on this question. If you know the answer it would be greatly appreciated. Thanks in advance!!
How can specialization lead to a gain from trade?
SPECIALIZATION- people concentrating on what they are good at
GAINS FROM TRADE- improvements in income, production, or satisfaction owing to the exchange of goods or services
- Anonymous1 decade agoBest Answer
Countries who specialize can create more goods than if they make multiple goods. If they specialize in what they are better than making than the other country, and the other country specializes in something different than the first country, the total amount of goods produced will be greater, and the two countries can trade to gain more total goods.
- AnneLv 44 years ago
Actually, try the economics section. I think the reserve ratio should be increased, that way banks have to keep more money and loan out less, decreasing the money supply and raising the interest rate. Or something.
- Paschal HLv 61 decade ago
SPECIALIZATION only works when you can trade with people who specialise in other areas. Without the trade, you have to do everything yourself.