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Please review the following video to increase your understanding of the effect of specialization on gains from trade.
Specialization and Trade (Links to an external site.)
Take a closer look at our local economy or a country of your interest and pick a good or a service that you believe America (or your country of choice) has a comparative advantage in producing. Discuss the factors that you believe give America (or your country of choice) such an advantage.
In addition, is it better for a country to export more or to import more?
Moreover, what is the impact of trade surplus (exporting more than importing) and trade deficit (importing more than exporting) on GDP, employment, and the exchange rate of the country’s currency?
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