If Two Nations Want to Trade with One Another, They

question 43

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

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Definitions:

Tape Recordings

Audio recordings made on magnetic tape, historically used for music, speech, and other sound storage.

Experiments

Research methods involving the manipulation of one or more variables to determine their effect on a certain outcome, typically to establish cause-and-effect relationships.

Overconfidence

A cognitive bias characterized by an individual's overestimation of their knowledge, ability, or access to information.

Cross-examining

The process of questioning a witness who has already testified in order to test or check the accuracy of that testimony.