The Theory of Absolute Advantage Is

question 45

Multiple Choice

The theory of absolute advantage is:

• A) The idea that free market forces should determine how much to trade with little government intervention.
• B) The economic advantage one nation enjoys that is absolutely superior to other nations.
• C) The idea that governments should actively protect domestic industries from imports and vigorously promote exports.
• D) The belief that held that the wealth of the world was fixed and that a nation that exported more and imported less would enjoy the net inflows of gold and silver and thus become richer.

---

Definitions:

Holder in Due Course

A party that has acquired a negotiable instrument in good faith and without notice of any defect in title.

Maker

The individual or entity that creates or produces an item or is the original writer of a check or promissory note.

Without Recourse

A term indicating that the holder of a financial instrument cannot demand payment from the issuer in the case of default.

Banking Day

A business day during which financial institutions are open for business with the public.