If Gains from Trade Are Based Solely on Comparative Advantage

question 144

True/False

If gains from trade are based solely on comparative advantage, and if all countries have the same opportunity costs of production, then there are no gains from trade.

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Definitions:

Lump Sum Payment

An isolated financial disbursement occurring once, instead of being divided into multiple payments over a duration.

Annual Interest Payments

Periodic payments made to bondholders, typically annually, that represent the interest earned on the investment.

Effective Annual Rate

The real return on an investment, taking into account the effect of compounding interest over a year.

Annual Percentage Rate

The annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs.