Which of the Following Statements Is True

question 33

Multiple Choice

Which of the following statements is true?

• A)Exports tend to decrease economic efficiency.
• B)A nation should specialize in producing a good in which it has an absolute advantage.
• C)A nation should specialize in producing a good only when it has both an absolute and a comparative advantage.
• D)A nation should specialize in producing a good in which it has a comparative advantage.
• E)International trade does not reflect the benefits of specialization.

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Definitions:

Return

The gain or loss on an investment over a specific period, usually expressed as a percentage of the investment's initial cost.

Total Risk

The complete range of risks associated with an investment, including both systemic and unsystematic risk.

Modigliani

Refers to Franco Modigliani, an Italian-American economist known for his work on corporate finance, the Modigliani-Miller theorem, and the life-cycle hypothesis of saving.

Developed

Pertains to countries that have a high level of industrialization, a high standard of living, and a well-established economic structure.