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Modern international trade is based on the principle of?

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Economics WAEC 2017

Modern international trade is based on the principle of?

  • absolute cost advantage
  • comparative advantage checkmark
  • terms of trade
  • balance of trade

The correct answer is: B

Explanation

Comparative advantage is an economic term that refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners. A comparative advantage gives a company the ability to sell goods and services at a lower price than its competitors and realize stronger sales margins.

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