What is considered to be the cornerstone of international trade?Multiple choice question.SpecializationTransportationTechnologyExchange rates

Break Down the Problem

To determine the cornerstone of international trade, we need to analyze each option provided in the context of its importance to trade relations between countries.

Relevant Concepts

1. Specialization: The process by which countries focus on producing goods where they have a comparative advantage.
2. Transportation: The methods and infrastructure necessary for moving goods across borders.
3. Technology: Refers to advancements that improve production and logistics.
4. Exchange Rates: The value of one currency for the purpose of conversion to another, affecting trade balance.

Analysis and Detail

1. Specialization: It allows countries to produce what they can do more efficiently. This leads to better resource allocation and increased total output.
2. Transportation: Without reliable transportation, trade cannot occur effectively. It's crucial but is more of a facilitator than a core principle.
3. Technology: While technology enhances the efficiency of trade and production, it is an enabler rather than the foundational concept.
4. Exchange Rates: They influence how much of one currency is needed to trade for another's goods but do not directly drive the process of trade itself.

Verify and Summarize

Upon examining each option, specialization stands out as the foundational principle driving international trade, as it promotes efficiency and comparative advantage among nations.

Final Answer

Specialization is considered to be the cornerstone of international trade.