Question

Two countries produce milk and dairy products efficiently. Neither has an absolute advantage. However, Country A exports milk to Country B, and Country A imports cotton from Country B. Which of the following is inferred?

Answer 1

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Answer 2

This is what is referred to as us integrating economies which builds up to globalisation., the income obtained from the export of milk is the one that facilitates the importation of cotton, therefore the country B which also produces dairy product but still imports milk does not maximise the consumption of its resources. Therefore down grading development.