The Basic Idea Behind the Human Skills Theory of Comparative

question 35

Multiple Choice

The basic idea behind the human skills theory of comparative advantage is that countries with a relatively abundant stock of highly skilled labor have

• A) high wages and thus suffer a comparative disadvantage.
• B) low wages and thus suffer a comparative disadvantage.
• C) an absolute advantage in producing goods that require relatively large amounts of skilled labor.
• D) a comparative advantage in producing goods that require relatively large amounts of skilled labor.
• E) so much productivity relative to other countries that they have a comparative advantage in everything they produce.

Distinguish between different theories related to interest rates and term structure.

Recognize the significance of bond ratings and the factors influencing them.

Identify the features and benefits of inflation-indexed bonds.

Understand the operational mechanisms and purposes of different bond provisions.

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