When Two Countries Trade, Total Output Increases When Each Country

question 16

Multiple Choice

When two countries trade, total output increases when each country specializes in something in which it has its respective _____ advantage.

• A) comparative
• B) absolute
• C) equal
• D) production

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Definitions:

Federal Receipts

Revenue collected by the federal government, generally through taxes and fees.

Marginal Tax Rate

The Marginal Tax Rate is the tax rate applied to an individual's or corporation's last dollar of income, showing the fraction of additional income that is paid in tax.

Average Tax Rate

The average tax rate is the percentage of total income that an individual or corporation pays in taxes, calculated by dividing total tax paid by total income.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the rate applied to each additional dollar of income.