If a Nation Has the Lowest Opportunity Cost of Producing

question 68

Multiple Choice

If a nation has the lowest opportunity cost of producing a good, that nation has a(n) :

• A) comparative advantage.
• B) absolute advantage.
• C) comparative advantage and an absolute advantage.
• D) absolute advantage and possibly a comparative advantage.

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Definitions:

Effective Interest

The real cost of borrowing or the actual interest rate earned, considering compounding and fees.

Amortize Discount

The gradual reduction of a bond discount over the life of the bond, expensed as interest over the period.

Straight-Line Method

The Straight-Line Method is a way of calculating depreciation of an asset, where the asset's cost is evenly spread over its useful life.

Other Than Temporary

Classification of impairments or losses indicating that the reduction in value is not expected to reverse in the near future.