The Theory of Comparative Advantage

question 31

Multiple Choice

The theory of comparative advantage:

• A)helps to analyse the absolute advantages of countries involved.
• B)suggests that a country that does not have an absolute advantage should import everything.
• C)analyses the nature and the extent of specialisation undertaken by nations.
• D)suggests that a country specialise in producing goods or services for which it has a higher opportunity cost.

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Definitions:

Child Support

Payments mandated by a divorce decree or agreement intended for the financial support of the taxpayer's children.

Alimony

Payments made to a spouse or former spouse under a divorce or separation agreement, which may be deductible by the payer and taxable to the recipient under certain conditions.

Moving Expenses

Costs associated with relocating, such as transportation and packing, which may be deductible from taxable income under certain conditions for employment-related moves.

Employment Test

A criterion used to determine whether an individual's work arrangements or services provided qualify them as an employee or independent contractor for tax purposes.