The benefits of increased international trade include which of the following?

• A. greater market inefficiencies
• B. total output is increased
• C. concentration of wealth
• D. higher inflation

Answer: (B)

Gains from international trade come from specialization and more efficient use of resources. When countries focus on producing what they have a comparative advantage in and trade with others, resources are allocated more efficiently and production can expand beyond what each country could achieve on its own. This expansion leads to higher total output across the global economy, which is why the option stating that total output is increased is the best answer.

The other ideas don’t reflect a universal benefit of trade: increased market inefficiencies aren’t a positive outcome of trade (competition and better allocation usually reduce inefficiencies); wealth concentration is an uneven distribution issue rather than a direct benefit of trade; and higher inflation is not a guaranteed benefit of trade and can be influenced in various ways.