Which of the Following Is Consistent with International Trade Theory

question 82

Multiple Choice

Which of the following is consistent with international trade theory?

• A) The United States needs trade restrictions to stay competitive.
• B) The United States has been falling behind Europe and Japan because its economy is too open.
• C) The standard of living within a country is a function of the economic strength of the economy and not of its relative position.
• D) A country should strive for comparative advantage in manufacturing.

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Definitions:

Private Consumption

The total value of all goods and services consumed by households and individuals within an economy, excluding government spending and investments.

Gross Investment

The total amount spent on purchases of new capital assets plus replacement of worn-out or obsolete assets.

Gross National Income

The total domestic and foreign output claimed by residents of a country, including wages, salaries, and property income.

Gross Domestic Product

The sum value in currency or market terms of every finished product and service created within a country during a specified period.