According to David Ricardo's Principle of Comparative Advantage,there Will Be

question 25

Multiple Choice

According to David Ricardo's principle of comparative advantage,there will be gains from international trade

• A)only by a country with an absolute advantage in the production of some commodity.
• B)only by developed countries.
• C)by any trading country with opportunity costs similar to other countries.
• D)by only one country if opportunity costs are identical across countries.
• E)by any country with opportunity costs different from other countries.

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Definitions:

Common Stock

A share of stock is an ownership claim on a firm, entitling its owner to a profit share.

Firm's Profits

The financial gains a company makes after subtracting all its costs from its total revenues.

Capital Goods

Long-lasting goods acquired by businesses to produce goods or services and not intended for immediate sale.

Savings Market

The financial market where savings are channeled from individuals or entities with surplus funds to those who need funds for investment.