Question

A country can produce a surplus of those products or services and export them to other countries. Similarly, it can import the goods or services which it is deficient in. This pattern of expertise based on territory provides a strong incentive for international trade. Hence, we could say that international business evolved as a result of ___.

• A. Geographical specialisation
• B. Easy mobility of labour and capital
• C. Globalisation
• D. None of the above

Answer 1

The correct option is A

Geographical specialisation

A country can produce a surplus of those products or services and export them to other countries. Similarly, it can import the goods or services which it is deficient in. This pattern of expertise based on territory provides a strong incentive for international trade. Hence, we could say that international business evolved as a result of geographical specialization.