Refer to the Graph Shown

question 86

Multiple Choice

Refer to the graph shown. If Countries X and Y face the production possibility curves A and B, respectively, Country X has a comparative advantage in the production of:

• A)neither agricultural goods nor industrial goods.
• B)both agricultural goods and industrial goods.
• C)agricultural goods only.
• D)industrial goods only.

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Definitions:

Export Processing Zones

Special areas within countries where imported materials undergo processing or manufacturing before being exported again, typically benefiting from incentives like tax exemptions.

Fiscal Policy

Economic policies used by a government, involving changes in taxation and spending, to influence the economy.

Monetary Policy

Refers to the actions undertaken by a nation's central bank to control the money supply to achieve macroeconomic goals that promote sustainable economic growth.

NAFTA

The North American Free Trade Agreement, a treaty made to eliminate trade barriers between the U.S., Canada, and Mexico.