The Insight That Patterns of Trade Are Primarily Determined by International

question 9

Multiple Choice

The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed by

• A) Adam Smith.
• B) David Hume.
• C) David Ricardo.
• D) Eli Heckscher.
• E) Lerner and Samuelson.

---

Definitions:

Risk-free Rate

A presumed income from an investment that is free from any financial risk, typically reflected through government bond yields.

Efficient Frontier

A set of optimal portfolios that offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return, used in modern portfolio theory.

Expected Return

The projected profitability of an investment over a given period.

Interest Rates

The expense associated with obtaining a loan, represented as a percentage of the total loan value, usually calculated on a yearly basis.