The Principle That an Obligation to Pay a Particular Sum

question 24

Multiple Choice

The principle that an obligation to pay a particular sum of money is fixed and does not change even if the purchasing power or foreign exchange rate of the money does change is known as ________.

• A) the choice-of-law rule
• B) centrism
• C) nominalism
• D) the stabilization clause

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Definitions:

Specialization

The process in which individuals or entities focus on a narrow area of expertise or production, leading to increased efficiency and productivity.

Absolute Advantage

Absolute advantage refers to the ability of a country, company, or individual to produce a good or service more efficiently than competitors, using the same amount of resources.

Trade

The trading of goods, services, or a combination of both among two or more entities, domestically or across borders.

Comparative Advantage

The capability of a person, business, or nation to manufacture a product or provide a service with a smaller opportunity cost compared to rivals.