The Ricardian Model of Comparative Advantage Lends Support to the Argument

question 8

Multiple Choice

The Ricardian model of comparative advantage lends support to the argument that

• A) trade tends to worsen the conditions of unskilled labor in rich countries.
• B) trade tends to worsen the conditions of owners of capital in rich countries.
• C) trade tends to worsen the conditions of workers in poor countries.
• D) trade tends to worsen the conditions of workers in rich countries.
• E) trade is mutually beneficial to the countries that engage in it.

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Definitions:

Electricity Generation

The process of producing electrical energy from primary energy sources, such as coal, natural gas, nuclear, solar, or wind.

Natural Gas

A fossil fuel formed from the decay of organic material over millions of years, used as a source of energy for heating, cooking, and electricity generation.

Hydropower

The generation of electricity by utilizing the energy of flowing water, typically by damming rivers to create reservoirs.

Pollution Credits

Allowances granted to companies, permitting them to emit a certain amount of pollutants; they can be traded among companies.