Trade Restrictions May Be Counterproductive If They Discourage Workers from Migrating

question 6

True/False

Trade restrictions may be counterproductive if they discourage workers from migrating to industries that have a comparative advantage.

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Definitions:

Unsystematic Risk

The risk specific to an individual asset or company, such as management decisions or product recalls, which can be mitigated through diversification.

Diversification

An investment strategy that involves spreading investments among various financial instruments, industries, or other categories to minimize risk.

Diversifiable Risk

The risk that can be reduced or eliminated from a portfolio through diversification, as opposed to non-diversifiable risk.

Rational Investor

An individual who makes investment decisions based on logical analysis, aiming to maximize returns while minimizing risks.