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Suppose two countries could produce milk or rice. Use the list below to identify the different reasons countries should trade.

I. Countries should trade if they want to be self-sufficient

II. Countries should trade only if they have a comparative advantage in both rice and milk.

III. Countries should trade only if they have absolute advantage in rice and milk production.

A

I Only

B

II Only

C

III Only

D

I and II

E

None of the above

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