Which of the Following Statements Is the Best Description of Comparative

question 320

Multiple Choice

Which of the following statements is the best description of comparative advantage?

• A) The best way for a nation to ensure full employment is to be completely self-sufficient and not at all reliant on trading with other nations.
• B) Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce as efficiently as the nations that can.
• C) The nation that has the largest reserves of gold and other highly valued natural resources will enjoy a position of comparative advantage in trade relationships.
• D) A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for which domestic demand is comparatively weak.

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Definitions:

Common Approaches

Standard or widely accepted methods or procedures used to achieve a particular goal or complete a task.

Competition-oriented

An approach or strategy focused on understanding, adapting to, and outperforming competitors in the marketplace.

Price Level

The current average cost of goods and services in an economy or specific market, which can affect purchasing power and economic health.

Approaches

The methods or strategies used in dealing with or accomplishing a task or goal.