Which of the Following Phenomena Can Be Explained by the Simple

question 77

Multiple Choice

Which of the following phenomena can be explained by the simple comparative advantage theory?

• A) A country that has a vast amount of farmland tends to export agricultural goods.
• B) A country with little skilled labor tends to export highly technical goods.
• C) A country tends to import the goods that it can produce at a lower opportunity cost.
• D) A country imports and exports the same goods.

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Definitions:

Common Stock

Equity securities representing ownership interests in a corporation, providing voting rights and potential dividends to shareholders.

Treasury Stock

Represents shares that were previously issued and outstanding but have been repurchased by the company and are held in its treasury.

Cash Flow Statement

A financial statement that details the inflows and outflows of cash for an entity over a specific period, categorizing them into operations, investing, and financing activities.

Indirect Method

a financial reporting approach used to generate a cash flow statement, where net income is adjusted for changes in assets and liabilities that affect cash but not income.