Which of the Following Statements Best Describes the Theory of Comparative

question 26

Multiple Choice

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

• A)Each nation should produce those goods that it can produce more efficiently than other nations,and buy the goods it cannot produce efficiently from other nations.
• B)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.
• C)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.
• D)The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.

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