An Economic Principle That Explains Why Countries Produce Different Goods

question 118

Multiple Choice

An economic principle that explains why countries produce different goods and services is

• A)absolute advantage.
• B)trade as a percentage of GDP.
• C)comparative advantage.
• D)NAFTA.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, recognizing income based on the investor's share of the investee's profits.

Subsidiary Earnings

Profits generated by a company that is majority-owned or fully owned by another company (the parent company).

Income Statement

An income statement is a financial document that shows a company's revenues, expenses, and net income over a specific period.

Cash Surrender Value

The amount of money an insurance company will pay to a policyholder if their policy is voluntarily terminated before its maturity or an insured event occurs.