The Theory of Comparative Advantage _____

question 28

Multiple Choice

The theory of comparative advantage _____.

• A) reduces the wealth of the nation in the short run 
• B) provides direct policy advice 
• C) explains patterns of trade based on factor endowments 
• D) was the first theory to incorporate dynamic changes in patterns of trade

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Definitions:

Cost of Goods Sold

Costs directly linked to the creation of products sold by a business.

Fraud

Deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Employee Fraud

Dishonest activities conducted by employees to provide them with an advantage, financial or otherwise, at the expense of their employer.

Inventories

Goods and materials that a business holds for the purpose of resale or production.