With trade, countries are able to consume beyond their Production Possibilities Curve (PPC). This statement is _____.

The statement is true because trade allows countries to specialize in the production of goods and services for which they have a comparative advantage. By focusing on these areas, countries can produce more efficiently and, as a result, increase their overall output. When countries engage in trade, they are able to access a wider variety of goods and services than they would be able to produce on their own, which effectively allows them to consume at levels that exceed their Production Possibilities Curve (PPC).

The PPC illustrates the maximum feasible amount of goods that a country can produce given its resources and technology. However, through trade, countries can exchange surplus goods with one another, thus enabling them to enjoy a combination of goods that surpasses what they could achieve solely through their domestic production capabilities. This concept demonstrates the benefits of specialization and the advantages of comparative advantage in a global economy.

In contrast, the incorrect options suggest limitations that do not universally apply. For example, implying that the statement is only true for developed countries overlooks the potential for developing nations to also engage in trade and achieve similar benefits. Similarly, claiming that it is false due to tariffs ignores the broader context in which trade can facilitate consumption beyond the PPC, even when tariffs may influence specific trade dynamics.