What Proportion of International Trade Is Based on Absolute Advantage

question 9

Multiple Choice

What proportion of international trade is based on absolute advantage?

• A)All
• B)most
• C)some
• D)none

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Definitions:

Simple Interest

Interest earned only on the original principal amount invested.

Annually Compounded Interest

Interest on a loan or investment that is calculated once a year, adding the interest to the principal sum and basing future interest calculations on this new principal.

Amortized Daily Interest

Interest on a loan computed each day using the balance of the loan on that day, leading to a variable interest charge per billing period.

Discount Rate

In discounted cash flow analysis, this rate is crucial for the evaluation of the present value of cash flows anticipated in the future.