-Refer to Exhibit 15-4

question 40

Multiple Choice

-Refer to Exhibit 15-4.Identify the appropriate state of the bond market that would fill in blanks (A) ,(B) ,and (C) ,respectively.

• A) surplus; shortage; equilibrium
• B) shortage; surplus; equilibrium
• C) surplus; surplus; equilibrium
• D) shortage; shortage; equilibrium

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Definitions:

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 trade possibilities.

Specialize

Refers to the process of focusing on a specific area of knowledge or skill within a broader field.

Comparative Advantage

The ability of a party to produce a particular good or service at a lower marginal and opportunity cost over another.

Absolute Advantage

The ability of a country or entity to produce a good or service more efficiently than its competitors.