In the Real World We Don't Observe Countries Completely Specializing

question 86

Multiple Choice

In the real world we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.All of the following are reasons for this except

• A)not all goods and services are traded internationally.
• B)some countries have more resources than other countries.
• C)tastes for many traded goods are different in many countries because of globalization.
• D)production of most goods involves increasing opportunity costs.

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Definitions:

Weighted Average Cost of Capital

A calculation of a firm’s cost of capital in which each category of capital is proportionately weighted, including equity, debt, and other forms of financing.

Market Risk Premium

The extra return investors demand for taking the risk of investing in stocks over a risk-free asset.

Common Stock

A form of shares in a corporation that grants the owner voting privileges and entitlement to a portion of the corporation's earnings via dividends.

Yield to Maturity

The total return anticipated on a bond if the bond is held until its maturity date, accounting for interest payments and capital gain or loss.