A Country Engaging in Trade According to the Principles of Comparative

question 3

Multiple Choice

A country engaging in trade according to the principles of comparative advantage gains from trade because it

• A) is producing exports indirectly more efficiently than it could alternatively.
• B) is producing imports indirectly more efficiently than it could domestically.
• C) is producing exports using fewer labor units.
• D) is producing imports indirectly using fewer labor units.
• E) is producing exports while outsourcing services.

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Definitions:

Arithmetic Average

A simple mean calculated by adding a set of numbers and dividing the sum by the count of those numbers, used to determine central tendencies.

Arithmetic Average Return

The return earned in an average year over a multi-year period.

Total Percentage Return

A financial metric that measures the total return of an investment, expressed as a percentage, including all dividends and capital gains.

Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits, which can be issued in various forms such as cash payments or further shares.