Question

Suppose trade between the United States and Canada results in a $100 billion increase in production of agricultural goods. This gain from trade will:

a. go to the U.S. because it is the larger country.
b. go to Canada because it is the smaller country.
c. be split equally between the U.S. and Canada.
d. be split between the two countries, but the division may not be equal.

Answer 1

Answer:

D

Explanation:

The gain from the trade will be split between the two countries but the division may not be equal because the division of gain depend on several factors such demand and supply for goods as well as the price which we don't have the information about.