In International Trade Based on the Principle of Comparative Advantage

question 12

Multiple Choice

In international trade based on the principle of comparative advantage:

• A) only the partner with an absolute advantage is better off after the trade.
• B) both trading partners are better off after the trade.
• C) only one trading partner with a comparative advantage is better off after the trade.
• D) neither trading partner is better off after the trade.

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Definitions:

Standard Deviation

A statistical measure representing the dispersion or variability of a set of data points from their mean, often used in finance to gauge the volatility of an investment.

Effective Annual Rate

The interest rate on an investment or loan, annualized and taking into account the effects of compounding within the year.

Quarterly Return

The financial performance of an investment or asset over a three-month period, typically expressed as a percentage.

Investment

This refers to the allocation of resources, often financial, in assets or projects with an expectation of generating future returns.