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A Developing Nation May Not Experience an Increase in the Average

question 29

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A developing nation may not experience an increase in the average standard of living even if it increases its output of goods and services because of:


Definitions:

Gains From Trade

The benefit that entities receive from engaging in voluntary trade, often resulting in better allocation of resources and increased efficiency.

Comparative Advantage

The proficiency of an entity, whether it's an individual, corporate body, or state, to create a good or offer a service at a more economical opportunity cost than its competition.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing a particular course of action.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors, leading to more efficient global production patterns.

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