The Principle of Comparative Advantage

question 25

Multiple Choice

The principle of comparative advantage

• A)applies only when the gold standard is in effect.
• B)is the basic reason that the United States has been running trade deficits.
• C)states that it is advantageous to export more than you import.
• D)states that total output is greatest when each product is made by the country that has the lowest opportunity cost.

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Definitions:

Trin Ratio

A technical analysis indicator that compares the number of advancing and declining stocks to the volume of advancing and declining stocks.

Advancing Issues

Refers to the number of stocks whose prices have closed higher than they did in the previous trading session, often used as an indicator of market sentiment.

Framing

Decisions are affected by how choices are described, for example, whether uncertainty is posed as potential gains from a low baseline level, or as losses from a higher baseline value.

Potential Gains

The anticipated positive returns from an investment or venture, before accounting for expenses or losses.