Which of the Following Statements Is True of the Theory

question 5

Multiple Choice

Which of the following statements is true of the theory of absolute advantage?

• A) It was advocated by British economist David Ricardo.
• B) It opened the floodgates for the free trade movement.
• C) It suggests that international trade is a zero-sum game.
• D) It is more realistic and useful than comparative advantage when applied in the real world.

---

Definitions:

December Contract

A futures contract with a delivery or settlement date in December.

Gold Futures Contracts

Agreements to buy or sell a specific amount of gold at a predetermined price on a set date in the future, used for hedging or speculation on gold prices.

Futures Price

The agreed upon price for the future delivery of assets such as commodities or financial instruments, set in a futures contract.

Contract Maturity

The designated date on which the principal amount of a financial instrument such as a bond, loan, or futures contract becomes due and payable.