If nations trade on the basis of comparative advantage:
A. all trading partners can gain from trade.
B. exporting nations gain from trade and importing nations lose.
C. a nation usually can gain from trade only at the expense of its trading partners.
D. importing nations gain from trade and exporting nations lose.
Answer: A
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During the late 1980s and early 1990s, most of the budget deficits were accounted for by
A. the decline of foreign investment in the United States. B. the downturn in the economy. C. deliberate fiscal policy changes. D. all of the above are correct.
________ policy involves decisions about government spending and taxation
A) Monetary B) Fiscal C) Financial D) Systemic
There are two coal-burning electrical utilities—one in tiny, rural Wanunu, Montana, and another in metropolitan Detroit, Michigan—and each produces the same amount of pollution per unit of output
If a permit tax is going to be used to force these firms to internalize pollution costs, the tax levied should be A) the same in each city. B) higher in Wanunu than in Detroit. C) higher in Detroit than in Wanunu. D) less than zero in each city.
In France a loaf of bread costs 3 euros. In Great Britain a loaf of bread costs 4 pounds. If the exchange rate is .9 pounds per euro, what is the real exchange rate?
a. 4/2.7 loaves of British bread per loaf of French bread b. 3.6/3 loaves of British bread per loaf of French bread c. 3/3.6 loaves of British bread per loaf of French bread d. 2.7/4 loaves of British bread per loaf of French bread