According to the Principle of Comparative Advantage,trade Between Two Countries

question 159

Multiple Choice

According to the principle of comparative advantage,trade between two countries will benefit

• A) neither country.
• B) the country with lower production costs.
• C) the country with higher production costs.
• D) both countries.
• E) all workers.

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Definitions:

Non-Financial Assets

Assets that are not in the form of cash or cannot be easily converted to cash, such as property, plant, and equipment.

Risk-Free Assets

Investments that are considered to carry no risk of financial loss, typically represented by government bonds or treasury bills.

Equity Investments

Investments in stocks or shares, representing ownership in a company or entity and participation in its profits.

Risk Free Rate

The rate of return on an investment with no risk of financial loss, typically represented by the yield on government bonds.