Which of the Following Statements About Comparative Advantage Is FALSE

question 19

Multiple Choice

Which of the following statements about comparative advantage is FALSE?

• A) There is always a trade between two countries that can make both better off.
• B) A country's comparative advantage cannot be determined by looking only at its own economy.
• C) International trade will benefit an entire economy, but some particular groups of people may be hurt by expanding trade.
• D) Expanding international trade hurts a nation's economy if it causes the nation's currency to depreciate.

---

Definitions:

Amortized Loan

An amortized loan is a loan where the principal is paid down over the life of the loan, typically through equal payments.

Present Value

The equivalent value today of cash flows or a sum of money anticipated in the future, using a predetermined return rate.

Annuity

A financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.

Interest Rate

Interest rate is the percentage charged by a lender to a borrower for the use of assets, adjusting for the cost of credit or the return on investment.