Because countries cannot produce all of the goods/services that it needs, they must(1 point)
Responses
Reduce the need for imports
Reduce the need for imports
Specialize and trade on a global scale
Specialize and trade on a global scale
Eliminate consumption of scarce goods.
Eliminate consumption of scarce goods.
Increase domestic production.
Specialize and trade on a global scale
That is correct! Countries specialize in producing the goods and services in which they have a comparative advantage and then trade with other countries to obtain the goods and services they need but cannot produce efficiently themselves. This allows for increased efficiency and a wider variety of goods available to consumers.
To determine the correct response, let's evaluate each option:
1. Reduce the need for imports: One way countries address the limitations of domestic production is by trying to reduce their reliance on imported goods and services. This can be achieved through various means such as promoting domestic production, encouraging self-sufficiency, and implementing import-substitution policies. However, this response is duplicated, so let's consider the next option.
2. Specialize and trade on a global scale: Another approach for countries to address the limitations of domestic production is through specialization and global trade. Countries focus on producing goods and services that they can efficiently and effectively produce, utilizing their available resources and expertise. By specializing, countries can maximize their productivity and efficiency, leading to increased output and competitiveness. Furthermore, countries can engage in international trade to obtain goods and services they cannot efficiently produce domestically, thus enhancing their overall economic well-being.
3. Eliminate consumption of scarce goods: While it may be advantageous to avoid the consumption of scarce goods, it is not a direct solution to the limitations of domestic production. Scarce goods are typically limited in supply and may not be efficiently produced domestically due to various reasons such as cost, resources, or expertise. Therefore, eliminating consumption of scarce goods alone cannot address a country's need for goods and services that it cannot produce domestically.
Considering the explanations provided, the correct response is "Specialize and trade on a global scale".