Which of the Following Is Correct with Respect to Absolute

question 7

Multiple Choice

Which of the following is correct with respect to absolute and comparative advantage?

• A) Brazilian coffee beans are a good example of comparative advantage.
• B) Absolute advantage exists when a country can produce something more cheaply and/or of higher quality than the next three most efficient countries.
• C) A country has a comparative advantage when it can produce a product more efficiently or better than most (but not all)other countries.
• D) All countries have a comparative advantage in some products.
• E) All of these.

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Definitions:

Future Value

The value of an investment or cash flow at a specified future date, considering the applied interest rate or rates of return.

Cash Flow Stream

A cash flow stream is a series of cash inflows and outflows over a period of time, typically used in financial analysis to determine the value or profitability of an investment.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.