The Theory of Comparative Advantage

question 41

Multiple Choice

The theory of comparative advantage

• A)claims that economic well-being is enhanced if each country's citizens produce only a single product.
• B)claims that economic well-being is enhanced when all countries compare commodity prices after adjusting for exchange rate differences in order to standardize the prices charged all countries.
• C)claims that economic well-being is enhanced if each country's citizens produce that which they have a comparative advantage in producing relative to the citizens of other countries,and then trade production.
• D)claims that no country has an absolute advantage over another country in the production of any good or service.

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Definitions:

Correcting Entry

A correcting entry in accounting is a journal entry made to amend a previously recorded error in the financial statements.

Special Journal

A special journal is an accounting journal dedicated to recording transactions of a similar type, improving efficiency and organization.

General Journal

A comprehensive record where all financial transactions of a business are initially recorded.

Sales Journal

A specialized journal used to record and track all sales of merchandise on credit, detailing each sale's customer name, date, and amount.