The First Example Used to Explain Comparative Advantage Used Two

question 176

Multiple Choice

The first example used to explain comparative advantage used two countries (England and Portugal) and two goods (wine and cloth) to show that

• A)each country would be better off from trade if it had an absolute advantage in producing one of the goods.
• B)each country would have a comparative advantage in the production of the good for which it had an absolute advantage.
• C)mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods.
• D)mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods.

Recognize how governments manipulate exchange rates and the tools they use, including intervention in forex markets.

Appreciate the role of inflation in influencing the value of currencies.

Understand the concept of expropriation and its impact on multinational corporations.

Realize the significance of the forward market in managing foreign exchange risk.

---

Definitions:

3-minute Step Test

A cardiovascular exercise test designed to evaluate aerobic fitness by measuring heart rate recovery after stepping on and off a platform for three minutes.

Cardiorespiratory Functioning

The efficiency with which the heart, lungs, and vascular system work together to supply oxygen to the body during sustained physical activity.

Acute Illnesses

Short-term health conditions that develop suddenly and have severe symptoms.

Manage Stress

Techniques and practices aimed at controlling a person's levels of stress for promoting better overall mental and physical health.