Countries trade with each other because it brings a lot of benefits. Two big reasons for this are specialization and comparative advantage. Let’s break that down:
Specialization: This means that countries focus on making what they do best. For example, if Sweden makes the best furniture and another country makes the best electronics, they can each create more stuff than if they tried to make everything themselves.
Comparative Advantage: This idea means that countries export, or sell to others, things they can make more easily or cheaply. This helps them earn more from trading.
Gains from Trade: When countries trade, they can get a wider variety of goods, usually at better prices. This makes their economies stronger and improves people’s lives.
In summary, trading helps countries grow by letting them focus on what they do best!
Countries trade with each other because it brings a lot of benefits. Two big reasons for this are specialization and comparative advantage. Let’s break that down:
Specialization: This means that countries focus on making what they do best. For example, if Sweden makes the best furniture and another country makes the best electronics, they can each create more stuff than if they tried to make everything themselves.
Comparative Advantage: This idea means that countries export, or sell to others, things they can make more easily or cheaply. This helps them earn more from trading.
Gains from Trade: When countries trade, they can get a wider variety of goods, usually at better prices. This makes their economies stronger and improves people’s lives.
In summary, trading helps countries grow by letting them focus on what they do best!