When a Rich Country That Has Absolute Advantages in All

question 90

Multiple Choice

When a rich country that has absolute advantages in all products begins trading with a poor country the wages in:

• A) the rich country will go down and the wages in the poor country will go up.
• B) both countries will go up.
• C) both countries will go down.
• D) the rich country will go up and the wages in the poor country will go down.

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Definitions:

Recession

A notable downturn in economic performance affecting the entire economy and persisting for several months.

Aggregate Demand

The sum of all expenditures on goods and services in an economy, inclusive of private and public spending, investments, and exports minus imports, within a specific timeframe.

Aggregate Demand

The entire appetite for goods and services across an economy, quoted at a chosen price level, during a determined timeframe.

World War II

World War II was a global conflict that lasted from 1939 to 1945, involving most of the world's nations and culminating in significant changes to political boundaries and power structures.