The United States of America possesses labor that can create highly clever and high-

quality investments and commodities at a relatively cheap cost of production, implying that labor

in America is both cost-effective and widely available. The problem is that other nations with

reasonable capital-labor costs, such as Japan and China, can outcompete America (Shen & Gu,

2016). The government's job is to preserve the consumer's competitive advantage by providing

products and services at a reduced cost. To boost the economy and defend its worldwide market

from the competition, the government must raise funds. When the government expands and adds

to its involvement in the market, the advantages gained from foreign markets will be preserved.

Comparative advantage is an economic phrase that describes a country's capacity to deliver

products and services at a reduced opportunity cost compared to its trade counterparts in the

worldwide market. It would boost sales margins, perhaps bringing in more revenues for the

country.

This is because the host nation would participate in commerce in areas with a competitive

edge, which may be any field of interest. It differs from the absolute advantage in that it refers to

a larger volume of output in contrast to trade partners, whereas this refers to a higher sale at a

lower opportunity cost in the international market. Consider the United States of America to

understand the notion of comparative advantage better. America is seen to have a competitive

advantage in specialized and capital-intensive labor. American employees are renowned for

producing sophisticated items and investment possibilities at a cheaper cost. This would imply

that the American labor group is more dependable in capital goods manufacturing and worldwide

marketing, given the international community's interest in the American economy's investment

market. Although China, the relative best rival, has a lower capital-labor advantage, this is

overshadowed by America's lower opportunity cost in this situation.

 In the present circumstance, the government has a significant role to play in preserving

the nation's comparative advantage, which would be lost unless adequate assistance is provided

in this manner. As a result, budgetary allocations must be evaluated and raised as needed to

safeguard a specific economic sector in the international market. For example, while looking at

American businesses, it is clear that more resources must be allocated to maintain the labor

market that produces such items to continue the production of high-quality goods in that sector

(Bhanumurthy & Kumar, 2021). The government's extra investment may come in more

significant budgetary allocations and investments in the economy, allowing the industry to

benefit from the move. Although strong protectionist policies are unlikely to produce the desired

market returns, it is clear that some proactive steps may be taken to ensure that the relative

advantage gained is not squandered.

 References

Bhanumurthy, K., & Kumar, H. (2021). US-China Trade: What does Revealed Comparative

Advantage Tell Us?. FOCUS : Journal Of International Business, 8(1), 1-25.

https://doi.org/10.17492/jpi.focus.v8i1.812101

Shen, G., & Gu, A. (2016). Revealed Comparative Advantage, Intra-industry Trade and the US

Manufacturing Trade Deficit with China. China & World Economy, 15(6), 87-103.

https://doi.org/10.1111/j.1749-124x.2007.00094.x\