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Applied to Trade in Two Goods Between Two Countries,the Principle

Question 32

Multiple Choice

Applied to trade in two goods between two countries,the principle of comparative advantage does not suggest that


A) a nation with an absolute disadvantage in producing both goods will have a comparative advantage in producing one of them
B) the two nations will specialize in the production of different goods
C) both nations will equally benefit from trade
D) consumption possibilities will exceed production possibilities after trade
E) each nation will import the good whose opportunity cost of production is higher at home than abroad

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