What primarily determines the benefits a country gains from engaging in international trade?

Foundations Of Modern Trade Theory MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Foundations Of Modern Trade Theoryeconomics-mcqs › foundations-of-modern-trade-theory
Published
1 Jun 2019
Last updated
28 May 2026

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Explanation

The advantages a country obtains from international trade depend largely on the difference between its autarky price (the price without trade) and the prevailing international terms of trade. This gap indicates how much better off the country is by participating in trade. The labor theory of value and the idea that a country must lose from trade are not accurate explanations of trade gains.

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