According to the Ricardian Model,the Source of Comparative Advantage Is

question 39

Multiple Choice

According to the Ricardian model,the source of comparative advantage is:

• A)differences in labor productivity in the different countries.
• B)differences in foreign trade policies followed by the governments of the various countries.
• C)differences in resource endowments of the economies.
• D)differences in the fields of research and development in the countries.
• E)differences in the taste and preferences of the consumers in the different countries.

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Definitions:

Net Cash Flows

The difference between a company's cash inflows and outflows within a defined period.

Annuity

A financial instrument that provides a consistent flow of payments to a person, mainly serving as a source of income for people in retirement.

Equal Cash Flow

A scenario in which cash inflows or outflows are the same in each period.

Internal Rate of Return Method

A capital budgeting method that calculates the return on investment by setting the net present value of cash flows equal to zero.