Whether exchange is between individuals, firms, or countries, voluntary trade occurs because:

a. only one party is made better off.

b. both parties are made better off.

c. financial agents devote resources to arranging such trades.

d. these trades create employment for the economy.

e. of mandates from the government.

Question

Business

Karsyn Galloway

20 November, 23:01

Whether exchange is between individuals, firms, or countries, voluntary trade occurs because:

a. only one party is made better off.

b. both parties are made better off.

c. financial agents devote resources to arranging such trades.

d. these trades create employment for the economy.

e. of mandates from the government.

+3

Answers (1)

Know the Answer?

Brooke Barnes · Answer 1

b. both parties are made better off.

Explanation:

People voluntary to trade when they will better off after the trade. Since individual or nation has different proficiency and endowment resources, the ability to produce some product will be different for each country.

For example, German people are skillful of making beer. They have efficient production. Whereas France have expertise in making perfume. It is reasonable for German people to buy perfume from France since it is cheaper and has better quality than making it themselves. On the other hand, if french want to drink beer, it is cheaper to buy from Germany. Thus, both Germany and France will be better of after the trade.