A Country That Has a Comparative Advantage in Producing Capital

question 66

Multiple Choice

A country that has a comparative advantage in producing capital goods will ________ a country that has a comparative advantage in consumption goods.

• A) reap all of the gains from trade when it trades with
• B) grow slower than
• C) reap fewer of the gains from trade when it trades with
• D) specialize in producing capital goods and trade with

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Definitions:

U.S. Economy

The economic system of the United States, characterized by a mixed economy with capitalist and regulatory elements.

Prosperity

A state of flourishing, success, or good fortune, often related to economic well-being.

Mechanization

The process of changing from working largely or exclusively by hand or with animals to doing that work with machinery.

Crop Output

The total amount of agricultural produce harvested in a given period, which can be affected by factors like weather, soil fertility, and farming practices.