If a Nation Does Not Have an Absolute Advantage in Producing

question 87

Multiple Choice

If a nation does not have an absolute advantage in producing anything, it

• A)has no comparative advantage either.
• B)will have a comparative advantage in the activity in which it is least inefficient.
• C)will try to get along without trade.
• D)will export raw materials and import finished products.

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Definitions:

Inventory

An accounting term referring to goods and materials held by a business for the purpose of sale or production.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Operating Cash Flows

Operating cash flows refer to the amount of cash generated by a company's normal business operations, intended to sustain and grow the business.

Net Working Capital

The spread between a firm's existing assets and ongoing liabilities, signifying the company's financial viability in the short term.