The Best Explanation of the Gains from Trade That David

question 47

Multiple Choice

The best explanation of the gains from trade that David Ricardo could provide was to describe only the outer limits within which the equilibrium terms of trade would fall.This is because Ricardo's theory did not recognize how market prices are influenced by:

• A) Demand conditions
• B) Supply conditions
• C) Business expectations
• D) Profit patterns

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Definitions:

Note Receivable

A written promise for amounts to be received by one party from another, typically including the terms for repayment.

Maturity Date

The specified date on a financial instrument when the principal is due to be paid back in full to the lender.

Cash Received

Funds that are taken in by a business, representing inflow from sales, investments, financing, and other sources.

Notes Receivable

Written promises for amounts to be received, typically noting interest, by a debtor in favor of the creditor.