Business Finance
Comparative Advantage and International Trade and Finance

Question Description

Explain how the trade agreement both helps and hurts the U.S. economy.

Final Answer

Comparative advantage works for both parties involved because they can reach a pareto level of production that maximizes the output for both producers.  The producers can then trade these outputs to reach the desired level of product.

This helps the US economy because it increases our overall GDP as it allows for specialization of work.  However, it can be seen as harmful to our economy because it involves some jobs that were traditionally done in the US being done in other countries. 

I hope this helps!

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UC Berkeley

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