When One Country Can Produce a Good More Efficiently Than

question 49

Multiple Choice

When one country can produce a good more efficiently than another country:

• A)that country should produce that good and be the sole "winner" of trade.
• B)that country can specialize in that good and choose only to export goods.
• C)both can specialize in the industry in which they have comparative advantage and experience mutual gains.
• D)None of these statements is true.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash, that can be used by a company to fund its operations and investments.

New Bonds

New bonds refer to debt securities that have been recently issued by a corporate or governmental entity to raise capital for various purposes.

Par Value

Par value refers to the nominal or face value of a bond, stock, or other financial instrument, indicating the amount that must be repaid at maturity.

Interest Rates

The cost of borrowing money or the return on invested capital, typically expressed as a percentage of the principal amount annually.