Figure 16.5.1 -Use the Following Statements to Answer This Question. I. There

question 7

Multiple Choice

Figure 16.5.1
-Use the following statements to answer this question. I. There are potential gains from trade when the economies of two countries differ so that one country has an absolute advantage in producing one good, while the second country has an absolute advantage in producing another good.
II) A country has an absolute advantage in producing a good if its cost is lower than the cost in another country.

• A) Both I and II are true.
• B) I is true, and II is false.
• C) I is false, and II is true.
• D) Both I and II are false.

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Definitions:

Unincorporated

Describes a business or area that has not been formed into a legal corporation or does not fall under a municipality's jurisdiction, respectively.

Limited Liability

A legal structure that restricts the financial liability of owners or shareholders of a company to the amount they have invested in the company.

Syndicate

An investment group that comes together for the explicit purpose of financing a specific large project.

Financing

The process of providing or obtaining the necessary funds for an endeavor such as a business venture, purchase, or investment.