Comparative Advantage Indicates That

question 115

Multiple Choice

Comparative advantage indicates that:

• A) specialization and exchange will permit trading partners to maximize their joint consumption.
• B) a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods.
• C) a nation can gain from trade only when its trading partners are not low-wage countries.
• D) countries should export products for which they are high-opportunity cost producers.

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Definitions:

Long-term Debt

Debt that is not due within the next year and is often used to purchase or invest in significant assets or finance ongoing operations.

Indirect Approach

A method used in accounting to prepare the cash flow statement, where non-cash activities are adjusted to net income to calculate cash flow from operating activities.

Direct Approach

A method of communication in which the main point or message is presented at the beginning, followed by supporting details.

Investing Activities

are financial transactions related to the acquisition or sale of long-term assets and investments outside the normal scope of business operations.