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Australia is a major producer of agricultural and dairy products and exports coffee, tea, spices, and milk products to the United States. The United States is the world's third largest supplier of machinery and exports heavy machinery to Australia. What explains the trade equation between Australia and the United States?

Respuesta :

jepessoa

Answer:

D) Nations with an absolute advantage in producing certain goods trade them for goods produced by other countries.

Explanation:

Australia is a major producer of agricultural products, that means it has an absolute or comparative advantage in the production of agricultural products. On the other hand, the US has an absolute or comparative advantage in the production of heavy machinery. Since the US needs agricultural products that Australia produces, and Australia needs heavy machinery that the US produces, they can both benefit from trading with each other. Each country sells the products they are good at producing and receive the products they need.

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