large countries tend to trade less externally than the small countries What is the fundamental reaso...........

Economic Affairs Foreign Trade - Trends and Policy

large countries tend to trade less externally than the small countries. What is the fundamental reason behind this?

Small countries have a higher per capita income and hence more demand which leads to more external trade

Large countries are generally poor and therefore low demand does not incentivise external trade

Small countries lack an internal market and their benefits of trading with the world are relatively large as compared to the large countries.

None of the above

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Explanation:

The fundamental reason behind the large countries tend to trade less externally than the small countries is that small countries lack an internal market and their benefits of trading with the world are relatively large as compared to the large countries.