If Two Nations Want to Trade with One Another,they Can

question 125

Multiple Choice

If two nations want to trade with one another,they can determine their respective comparative advantages by

• A)hiring economists to gather and interpret the relevant data.
• B)first determining which has absolute advantage in the production of goods and services.
• C)allowing firms in each country to freely engage in international trade.
• D)making certain that the prices of tradable goods and services are equal in both nations.
• E)computing the opportunity costs of all goods and services.

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Definitions:

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A set of beliefs concerning the cause, nature, and purpose of the universe, often involving ritual observances and a moral code governing the conduct of human affairs.

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