Which of the Following Would Not Result from All Countries

question 12

Multiple Choice

Which of the following would not result from all countries specializing according to the principle of comparative advantage?

• A)The size of the economic pie would increase.
• B)Worldwide production of goods and services would increase.
• C)The well-being of citizens in each country would be enhanced.
• D)Each country's production possibilities frontier would shift inward.

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Definitions:

Cash Flow Hedge

A strategy used in financial risk management to protect against the risk associated with fluctuations in cash flows due to changes in interest rates, foreign exchange rates, or other variables.

Initiation Date

The specific date at which a particular transaction, project, or contract begins.

Forward Contract

A bespoke contract involving two parties for the buying or selling of an asset at an agreed price on a designated future date.

Currency Option

An economic instrument granting the bearer the option to swap currencies at an established rate on a designated date, without the compulsion to proceed.