According to the Theory of Trade, If Two Countries Trade

question 40

Multiple Choice

According to the theory of trade, if two countries trade with each other:

• A) consumption in one country will fall and wages will also fall.
• B) wage costs will remain low if both countries specialize in producing the goods for which they have a comparative advantage.
• C) trade raises the labor productivity and wages of both countries.
• D) wages in the country with a comparative advantage will rise and wages in the country without a comparative advantage will fall.

---

Definitions:

16-PF

A personality test that measures sixteen personality factors, developed by Raymond Cattell to assess individual personality traits.

MMPI

Minnesota Multiphasic Personality Inventory; a standardized psychometric test used extensively in psychological assessment to diagnose mental disorders.

Separate Abilities

The theory that intelligence is composed of distinct dimensions that are not necessarily related to each other, challenging the notion of a single, unified intelligence.

WAIS-III

The Wechsler Adult Intelligence Scale-Third Edition, a tool used to measure adult intelligence and cognitive ability.