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:

Annual Rate of Interest

The yearly interest rate charged on borrowed money or paid on investments, expressed as a percentage of the principal.

Retirement

The period in one's life when they choose to permanently leave the workforce behind and cease employment.

Average

A statistical measure representing the central or typical value in a set of data, often calculated as the sum of the values divided by the number of values.

Increase in Value

The appreciation or growth in the worth of an asset or investment over time.