Comparative Advantage Indicates That

question 20

Multiple Choice

Comparative advantage indicates that:

• A) specialization and exchange will cause trading partners to reduce their joint output.
• B) a nation can gain from trade even when it is at an absolute disadvantage in producing all goods.
• C) trade with low-wage countries will pull down the wages of workers in high-wage countries.
• D) all of the above.

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Definitions:

Supplies

Items used in the operation of a business that are not directly associated with the products or services being sold, such as office supplies.

Contra-Asset

An account that reduces the value of an asset account with which it is paired, used to account for allowances, depreciations, or impairments.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its useful life to date.

Contra-Asset

An account that decreases the balance of its associated asset account through a contra entry.