Which of the Following Statements Best Describes the Theory of Comparative

question 246

Multiple Choice

Which of the following statements best describes the theory of comparative advantage?

• A) The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services.
• B) Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce efficiently from other nations.
• C) The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.
• D) A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for which domestic demand is comparatively weak.

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Definitions:

Weak Internal

Referring to the lack of strength, structure, or robust processes within an organization's internal framework, affecting its effectiveness and efficiency.

Position Power Base

The authority or influence a person holds in an organization or group based on their role or position.

Legitimate

Lawfully recognized or conforming to established rules and standards, having a justified or recognized claim.

Informal

Relating to interactions that occur in a casual or non-official capacity.