The Theory of Comparative Advantage Says That Countries

question 220

Multiple Choice

The theory of comparative advantage says that countries

• A) should restrict trade by cutting off all imports.
• B) should import those goods they can produce at a lower opportunity cost than another country.
• C) can never benefit from specialization in trade.
• D) should export those goods they can produce at a lower opportunity cost than another country.

Analyze the factors influencing net exports and net capital outflow.

Explain the impact of international transactions on a country's net exports.

Determine the effect of currency exchanges and investment on net capital outflow.

Evaluate the relationship between a government's budget deficit and the country's trade balance.

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Definitions:

Renal Stones

Hard deposits made of minerals and salts that form inside the kidneys, also known as kidney stones.

Kidney

An organ in vertebrates responsible for filtering waste products from the blood and excreting them as urine.

Dysuria

Painful urination; difficulty in urination.

Voiding

The process of emptying the bladder of urine; also known as urination.