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:

Discount Rate

The interest rate charged by central banks for lending money to commercial banks or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

Project Profitability Index

A financial metric that calculates the ratio between the present value of future cash flows and the initial investment of the project.

Profitability Index

A financial metric that measures the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Investment Projects

Initiatives undertaken by companies or individuals to allocate capital in ways expected to yield returns or gains over time, such as purchasing new equipment or expanding operations.