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To Ensure Mutually Beneficial Trade,the Terms of Trade Between Two

Question 21

Multiple Choice

To ensure mutually beneficial trade,the terms of trade between two countries should always


A) Allow each country to develop its area of absolute advantage.
B) Be between their respective opportunity costs in production.
C) Be set to favor the larger country because its output will be greater.
D) Be set to favor the country with the least comparative advantage in a good to ensure the greatest gains from specialization.

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