Theory Based on ___________________ States That International and Interregional Differences

question 7

Multiple Choice

Theory based on ___________________ states that international and interregional differences in production costs occur because of differences in the supply of production factors.

• A) comparative advantage
• B) absolute advantage
• C) mercantilist advantage
• D) resource endowments
• E) exchange rates

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Definitions:

Short-term Capital Gain

A profit from the sale of an asset held for one year or less, taxed as ordinary income.

Long-term Capital Loss

A loss realized from the sale of a capital asset held for more than one year, which can offset capital gains and reduce taxable income.

Recognized Gains

Profits from the sale of an asset that are realized and subject to capital gains tax.

Tax Bracket

A range of income subject to a particular income tax rate. Tax systems often have several brackets, with individuals paying a higher rate as their income increases.