Multiple Choice
Which of the following statements best describes the theory of comparative advantage?
A) Each nation should produce those goods that it can produce more efficiently than other nations,and buy the goods it cannot produce efficiently from other nations.
B) A nation should produce those goods for which domestic demand is comparatively strong,and should import those goods for which domestic demand is comparatively weak.
C) The best way for a nation to ensure full employment is to be totally self-sufficient rather than relying on other nations to obtain goods and services.
D) The nation that has the largest reserves of gold and other natural resources will enjoy a position of comparative advantage in trade relationships.
Correct Answer:

Verified
Correct Answer:
Verified
Q21: An American firm recently criticized a Chinese
Q22: Tim Hortons is an example of a
Q23: For a firm to be considered a
Q24: One advantage of foreign licensing is that
Q25: Some governments may offer incentives to certain
Q27: NAFTA is an agreement between two countries:
Q28: The OECD has led global efforts to
Q29: A favourable balance of trade occurs when
Q30: Cartels are all contradictions to unrestricted free
Q31: A Mexican firm has agreed to trade