Which of the Following Ideas Is Closely Linked to the Theory

question 46

Multiple Choice

Which of the following ideas is closely linked to the theory of absolute advantage? 

• A) All international trade must be closely regulated by governments. 
• B) Free market forces should determine how much to trade with minimal government intervention. 
• C) Governments should actively protect domestic industries from imports and vigorously promote exports. 
• D) Nations should specialize in economic activities in which they have comparative advantage.

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Definitions:

Economic Efficiency

Economic Efficiency occurs when a system allocates resources in a way that maximizes the production of goods and services at the lowest cost.

Political Corruption

The abuse of entrusted power by political leaders for private gain, undermining democracy and governance.

Special-interest Effect

Describes how policy decisions can be influenced by small groups who stand to gain substantially, often at the expense of the larger population.

Taxpayers

Individuals or entities legally obligated to pay taxes to governmental authorities.