Even If There Are Big Gains to Be Had from Specialization

question 105

Multiple Choice

Even if there are big gains to be had from specialization and trade, countries generally don't produce only one good because:

• A)specialization is not limited by trade agreements.
• B)no national economy is a perfectly free market.
• C)there is perfectly free trade between national economies.
• D)consumers prefer a mix of goods and services.

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Definitions:

Covenants

Agreements or promises in a financial contract that certain activities will or will not be undertaken.

Dedicated Capital

Funds allocated specifically for a particular investment or project within a company.

Unsecured Debts

Financial obligations that are not backed by collateral, making them riskier for lenders and potentially resulting in higher interest rates for borrowers.