If a Country Has an Absolute Advantage at Producing One

question 50

Multiple Choice

If a country has an absolute advantage at producing one good, which of the following is true?

• A) It cannot have an absolute advantage at producing the other good.
• B) It must also have a comparative advantage at producing both goods.
• C) It can produce more of that good than the other good.
• D) It can produce more of that good given the same resources.

---

Definitions:

Macroeconomics

The study of economy-wide phenomena, including inflation, unemployment, and economic growth.

Consumption

The use of goods and services by households for personal needs or the process of using up resources or goods, leading to a decrease in their availability.

Investment Incentives

Investment incentives are benefits or policies designed to encourage businesses or individuals to invest in certain areas or sectors.

Interest Rate

Lenders require a payment, portrayed as a percentage of the principal, from borrowers for the use of their assets.