In a Two-Nation, Two-Good World, Which of the Following Statements

question 172

Multiple Choice

In a two-nation, two-good world, which of the following statements is true?

• A) One nation cannot possibly have an absolute advantage over the other nation in both products.
• B) If one nation has the comparative advantage in one product, then the other nation would have the comparative advantage in the other product.
• C) One nation will always have the comparative advantage over the other nation in one of the products.
• D) If one nation has the absolute advantage in one product, then the other nation would have the absolute advantage in the other product.

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Definitions:

Future Cash Flows

Future cash flows refer to the projected streams of revenue or expenses expected to be generated or incurred by a business or investment over time.

Current Value

The present worth of an asset or company, considering its financial standing, market condition, and other factors influencing its valuation at the current time.

Long-term Future

A period of time that extends beyond the immediate future, focusing on developing strategies or goals that will have an impact in the coming years.

Tangible Assets

Physical items of value owned by a business, such as buildings, machinery, or inventory.