Trade Between Two Countries

question 180

Multiple Choice

Trade between two countries:

• A) results in more choices and better prices for consumers.
• B) may cause job loss and firm closings in the country without the comparative advantage.
• C) is always positive for both consumers and producers.
• D) results in more choices and better prices for consumers and may cause job loss and firm closings in the country without the comparative advantage.

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Definitions:

Risk-Free Rate

A hypothetic return rate on a risk-free investment, usually shown by the returns on government securities.

Expected Return

The weighted average of all possible returns from an investment, accounting for the likelihood of each outcome.

Standard Deviation

Standard Deviation measures the amount of variation or dispersion from the average, indicating the risk associated with a variable.

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, typically within a year.