Question

Which of the following is not a reason for trade between nations:
(a) Specialisation
(b) Cost of production
(c) Differences in natural resources and geographical conditions
(d) None of the above
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Answer 1

Answer:

The five main reasons international trade takes place are differences in technology, differences in resource endowments, differences in demand, the presence of economies of scale, and the presence of government policies. Each model of trade generally includes just one motivation for trade.