How Is Comparative Advantage Determined

question 90

Multiple Choice

How is comparative advantage determined?  

• A) by the amount of resources needed to produce a good 
• B) by the money cost of producing any good 
• C) by the opportunity cost of producing any good 
• D) by absolute advantage and production possibilities combined

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Definitions:

Depression

An intense and extended period of economic recession marked by a substantial drop in Gross Domestic Product (GDP), elevated rates of joblessness, and a decrease in the general price level of goods and services.

Aggregate Demand

The aggregate requirement for all products and services within an economy, measured at a specific overall price level and during a certain time frame.

U.S. Government Securities

Financial instruments issued by the U.S. Department of the Treasury or other federal government agencies to finance federal spending, including Treasury bonds, notes, and bills.

Bank Reserves

The amounts of funds that a bank holds in its reserve account with the central bank or as cash in vault, to meet any sudden withdrawals.