If There Are High Transportation Costs

question 39

Multiple Choice

If there are high transportation costs

• A)the terms of trade will also be high
• B)the result could be incomplete specialization
• C)large countries will have an advantage in trading with small countries
• D)small countries will have an advantage in trading with large countries
• E)trade will be based on absolute advantage rather than comparative advantage

---

Definitions:

Nominal GDP

The gross domestic product measured in current prices, without adjusting for inflation, reflecting the value of all goods and services produced.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including currency, demand deposits, and other liquid instruments.

Velocity of Money

The rate at which money circulates or is exchanged in an economy, used to indicate the economic activity level.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, serving as an indicator of inflation.