Having an Absolute Advantage

question 237

Multiple Choice

Having an absolute advantage

• A) is the basis for specialization and trade.
• B) means having a higher opportunity cost than the trading partner.
• C) means having a lower opportunity cost than the trading partner.
• D) means being able to produce more of each product than the trading partner.
• E) means having a comparative advantage in production of the same goods.

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Definitions:

Future Cash Flows

Projected cash receipts and payments over a certain period, considered in investment analysis to determine an asset's present value.

S-corporation

A special type of corporation in the U.S. that allows profits, and some losses, to be passed directly to owners’ personal income without being subject to corporate tax rates.

Double Taxation

The levying of tax by two or more jurisdictions on the same declared income, asset, or financial transaction.

Financial Theory

The study of how individuals and corporations make investment decisions, and how these decisions affect financial markets and the overall economy.