This trade agreement between Nation 1 and Nation 2 is an example of specialization. Each nation specializes in producing what it can do best (Nation 1 in wheat and Nation 2 in steel), and then they trade their specialized products with each other.
Nation 1 has great soil for growing wheat but does not have the technology to produce steel. Nation 2 is considered a global leader in steel production but has very acidic soil, which makes growing wheat nearly impossible. Nation 1 and Nation 2 decide to enter a trade agreement. Nation 1 will sell wheat to Nation 2 since that is something that they are really good at. Nation 2 will sell steel to Nation 1 since that is what they are best at.
This trade agreement between these two nations is an example of
(1 point)
Responses
Mixed economy
Outsourcing
Interest rate
Specialization
1 answer