Chapter 18 notes - 1. Japan has a large, well-educated...

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The Economic Basis for Trade A. International trade is a way nations can specialize, increase the productivity of their resources, and realize a larger total output than they otherwise would. B. Two points amplify the rationale for trade. 1. The distribution of economic resources among nations is uneven. 2. Efficient production of various goods requires different technologies or combinations of resources. 3. Products are differentiated among nations and some people prefer imports. C. Interaction of these points can be illustrated.
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Unformatted text preview: 1. Japan has a large, well-educated labor force and can specialize in labor-intensive commodities. 2. Australia has an abundance of land relative to human and capital resources and can cheaply produce land-intensive agricultural products. 3. Industrially advanced nations (including Japan) are in a position to produce capital-intensive goods. D. As national economies evolve, the resource base may be altered affecting the relative efficiency with which nations can produce various goods and services....
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