Which of the Following Most Accurately States the Economic Significance

question 146

Multiple Choice

Which of the following most accurately states the economic significance of exchange?

• A) Physical goods have value because they exist; exchange can neither increase nor decrease their value.
• B) Exchange creates value by permitting trading partners to expand total output as the result of specialization in areas where they have a comparative advantage.
• C) Exchange creates value by moving goods from people who value the goods less to people who value the goods more.
• D) Both b and c are true.

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Definitions:

Commercial Transactions

Exchanges of goods, services, or financial assets in the course of business activities.

Streetwalkers

A term often associated with individuals who engage in prostitution on public streets.

Prostitution

The practice of engaging in sexual activity with someone for payment.

Status System

The stratification of individuals in a society based on various factors such as wealth, occupation, and education.