The Principle of Comparative Advantage Indicates That Mutually Beneficial International

question 5

Multiple Choice

The principle of comparative advantage indicates that mutually beneficial international trade can take place only when

• A)tariffs are eliminated.
• B)transportation costs are almost zero.
• C)relative costs of production differ between nations.
• D)a country can produce more of some product than other nations can.

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Definitions:

Index Model

A financial model that relates a stock's returns to the returns of a broader market index, used to estimate the stock's beta and expected returns.

Standard Deviation

A measure of the dispersion or variability of a set of values, widely used in finance to assess the risk associated with a particular investment.

Index Model

A statistical model used to predict stock prices by relating the returns of each stock to the returns of an overall market index.

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how spread out the data points are.