If There Is No Trade, Which of the Following Is

question 201

Multiple Choice

If there is no trade, which of the following is most likely?

• A) A country is better off because it will become self-sufficient.
• B) A country's production possibilities frontier is also its consumption possibilities frontier.
• C) A country can still benefit from international specialization.
• D) A country has more product variety available.

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Definitions:

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized by the lender if the borrower fails to repay the loan.

Secured Bonds

Bonds that are backed by collateral or assets, providing a higher level of security to bondholders.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a predetermined price within a specific time frame.

Retiring Bonds

Retiring bonds involves the repayment of the principal amount of the bond issue by the issuer before its maturity, often to take advantage of lower interest rates.