What Is the Source of Gains from Trade

question 59

Multiple Choice

What is the source of gains from trade?  

• A) tariffs 
• B) national self-sufficiency 
• C) absolute advantage 
• D) comparative advantage

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Definitions:

Expected Inflation

The rate at which it is forecasted that the general level of prices for goods and services will rise over a period of time.

Nominal Rate

The interest rate before adjustments for inflation, indicating the gross rate of return on an investment.

Holding-Period Return

The total return received from holding an asset or portfolio over a specified period, accounting for all income and capital gains.

Dividend

A portion of a company's earnings distributed to its shareholders, usually in the form of cash payments or additional shares.