​Trade Between Nations Is Based on Absolute Advantage, Which Occurs

question 52

True/False

​Trade between nations is based on absolute advantage, which occurs when a country has a lower opportunity cost of producing a good.

---

Definitions:

Interest Rate Swap

A financial derivative that companies use to exchange interest rate payments on debt over a set period.

Floating-Rate

An interest rate that fluctuates in response to market conditions or an index.

Currency Swap

Involves an agreement to exchange principal and interest in one currency for the same in another currency.

Foreign Currency Approach

A method used in global finance and investment analysis that involves evaluating investments or financial statements in a foreign currency.