Trade between Similar Economies
Completion requirements
Countries with similar economies are more likely to trade with one another, especially if they are at a similar development level, have political or security partnerships, or have cultural ties. Why might that be? Consider that qustion as you read this section, and then answer the questions at the end of the section.
Critical Thinking Questions
- Does intra-industry trade contradict the theory of comparative advantage?
- Do consumers benefit from intra-industry trade?
- Why might intra-industry trade seem surprising from the point of view of comparative advantage?