Germany and Malaysia are countries that trade with each other. if Germany has a

Question

Germany and Malaysia are countries that trade with each other. if Germany has a comparative advantage in cars and Malaysia has a comparative advantage in shoes, which of the following is a correct statement about the effects of trade between these nations?

A. both countries will lose jobs through trade and be worse off.

B. Germany will lose jobs in the car industry.

C. There will be a net loss of employment in Malaysia.

Both countries are likely to be better off, and world production will increase.

Explanation / Answer

Both countries are likely to be better off, and world production will increase.

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