Which of the Following Is TRUE About Comparative Advantage

question 88

Multiple Choice

Which of the following is TRUE about comparative advantage?

• A) Comparative advantage explains trade among nations, but not within nations.
• B) Comparative advantage explains trade within nations, but not among nations.
• C) Comparative advantage explains trade within nations and among nations.
• D) Comparative advantage has nothing to do with trade among nations; it only is concerned with specialization within a firm.

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Definitions:

Premium

The excess of the issue price of bonds over their face amount; the excess of the issue price of stock over its par value.

Bonds Payable

A liability account that records the amount owed by an entity to holders of its bonds, to be repaid at a specified future date.

Straight-Line Method

An accounting method for calculating the depreciation of an asset, distributing its cost evenly across its useful life.

Interest-Bearing Note

A debt instrument that pays periodic interest payments to the holder until maturity, at which point the principal is repaid.