When Two Countries Specialize and Trade with One Another, Total

question 41

Multiple Choice

When two countries specialize and trade with one another, total production:

• A) remains unchanged, but consumption rises.
• B) increases, but only if a comparative advantage exists.
• C) may increase, depending on trade relations.
• D) remains unchanged, as does consumption.

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Definitions:

Cease-And-Desist Order

A legal order issued by a government agency or court directing a person or entity to stop engaging in a particular activity.

Counteradvertising Order

A directive, often issued by a court or regulatory agency, requiring a business to advertise against its own previous misleading advertisements to correct public misinformation.

Substantiated

Supported with evidence or proof; verified as being true, accurate, or justified.

Equal Credit Opportunity Act

A U.S. federal law that prohibits discrimination by lenders against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because they receive public assistance.