The Ricardian Model Demonstrates That

question 31

Multiple Choice

The Ricardian model demonstrates that

• A) trade between two countries will benefit both countries.
• B) trade between two countries may benefit both regardless of which good each exports.
• C) trade between two countries may benefit both if each exports the product in which it has a comparative advantage.
• D) trade between two countries may benefit one but harm the other.
• E) trade between two countries always benefits the country with a larger labor force.

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Definitions:

Exact Simple Interest

Interest calculated on the initial principal of a loan or deposit, based on a precise calculation method rather than the common approximation methods.

365-Day Year

A method used in finance and accounting that assumes a year consists of 365 days to simplify interest rate calculations, disregarding leap years.

Exact Simple Interest

Interest calculated on the principal amount of a loan or investment, based on a 365-day year without compounding.

Loan Period

The duration of time from when a loan is issued to when it is expected to be fully repaid, including its principal and interest.