Ricardo's Model of Comparative Advantage Assumed All of the Following

question 142

Multiple Choice

Ricardo's model of comparative advantage assumed all of the following except:

• A) Trade is balanced,thus ruling out flows of money between nations
• B) Firms make production decisions in an attempt to maximize profits
• C) Free trade occurs between nations
• D) Labor is immobile within a country,but is incapable of moving between countries

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Definitions:

Reaction

A process in which chemical substances interact, leading to the rearrangement of their atomic connectivity and the formation of different substances.

Compound

A substance formed from two or more elements that are chemically combined in fixed proportions.

Common Name

A non-scientific or traditional name given to a substance or organism, often simpler and more widely used than its official name.

Organic Product

A compound predominantly composed of carbon and hydrogen atoms, typically resulting from the chemical reaction of organic substances.