Anonymous asked in Politics & GovernmentGovernment · 9 years ago

What are the reasons for international trade such as increased economies of scale?

1 Answer

  • 9 years ago
    Favorite Answer

    the primary reason is relative advantage in production cost. theory holds that each area [city, region, country, etc.] will hold some relative advantage in something over other areas and those things are the exports they should specialize in.

    i believe the term 'relative advantage' was coined by Adam Smith

    Source(s): grampa
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