Which of the following is the most likely reason for countries to engage in international trade based upon specialization of production?
A. Relative exchange rates
B. Relative levels of GDP
C. Relative inflation rates
D. Comparative advantage
Answer: D
You might also like to view...
Which of the following transactions is NOT recorded in the capital and financial account?
A) foreign investment in the United States B) U.S. investment abroad C) statistical discrepancy D) net interest income
Which phase of the business cycle would be most closely associated with an economic contraction?
A. Recovery B. Recession C. Peak D. Trough
Refer to Figure 18.1. Which of the following would most likely cause a shift from AD3 to AD2?
A. An increase in transfer payments because of a recession. B. An increase in the reserve ratio. C. An increase in taxes. D. A decrease in the discount rate.
In deciding on an optimal amount and type of research and development, firms should adhere to the rule: Expand R&D until:
A. expected rate of return is zero. B. expected rate of return equals the interest rate. C. expected rate of return exceeds the interest rate by the greatest amount. D. the interest rate is constant.