Specialization and trade are closely linked

a. comparative advantage.
b. gains to some traders that exactly offset losses to other traders.
c. shrinkage of the economic pie.
d. absolute advantage.

The correct answer is "a. comparative advantage.".

Explanation: Specialization and trade are closely linked to comparative advantage.

The comparative advantage is the ability of a person, company or country to produce a good using relatively less resources than another.

The concept of comparative advantage is one of the basic foundations of international trade.

The theory of comparative advantages postulates that each country in question will specialize in what is most efficient. At the same time, it will import the rest of the products in which they are most ineffective in terms of production.

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