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Chapter 21: Q. 36 (page 522)

Why is trade a good thing if some people lose?

Short Answer

Expert verified

Benefits the economy in the long run and encourages healthy competition.

Step by step solution

01

Step1. Introduction

International trade refers to the exchange of goods and services between two countries at a fixed exchange rate.

02

Step2. Explanation

Trade is a good thing if some people lose because it benefits the economy in the long run and increases the competition in the economy. Domestic producers lose from international trade but it improves the quality of product by encouraging healthy competition, hence improving standard of living and leading to the long-term economic growth.

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