Which of the Following Statements Is the Best Description of Comparative

question 320

Multiple Choice

Which of the following statements is the best description of comparative advantage?

• A) The best way for a nation to ensure full employment is to be completely self-sufficient and not at all reliant on trading with other nations.
• B) Each nation should produce those goods that it can produce more efficiently and effectively than other nations, and buy the goods it cannot produce as efficiently as the nations that can.
• C) The nation that has the largest reserves of gold and other highly valued natural resources will enjoy a position of comparative advantage in trade relationships.
• D) A nation should produce those goods for which domestic demand is comparatively strong, and should import those goods for which domestic demand is comparatively weak.

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Definitions:

Competitiveness

Refers to the desire to be more successful than others.

Risk Taking

The act of engaging in behaviors or decisions that have the potential for negative consequences but are pursued for potential positive outcomes.

Need To Belong

An innate human desire to form and maintain strong, stable relationships with others.

Interpersonal Contact

Direct interaction between two or more individuals, involving communication or physical presence.