Which of the Following Most Accurately States the Economic Significance

question 154

Multiple Choice

Which of the following most accurately states the economic significance of exchange?

• A) Physical goods have value because they exist; exchange can neither increase nor decrease their value.
• B) Production of physical goods creates value; exchange merely redistributes this value.
• C) Exchange creates value by moving goods from parties who value them less to parties who value them more.
• D) Exchange reduces value since it consumes resources without adding to the physical supply of goods.

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Definitions:

Imports

Goods and services brought into a country from abroad for sale.

Exports

Goods and services produced in one country and sold to buyers in another, contributing to a country's GDP.

Purchasing-Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to assess their purchasing power equivalence.

Inconsistency

Lack of coherence or uniformity in actions, statements, or conditions.