Which one of the following is a true statement? O Trade can be beneficial if one
ID: 1124125 • Letter: W
Question
Which one of the following is a true statement? O Trade can be beneficial if one trading partner has an absolute advantage O Trade can be beneficial if each trading partner has an absolute advantage in producing its export products DQuestion 2 1 pts A country that has a comparative advantage in producing good X means O import good X O be the higher price seller of good X D Question 3 1 pts The United States tends to have a comparative advantage in the production of D Question 4 1 pts Increased levels of U.S imports will result in O all of the following O leakages from the US GDP tankExplanation / Answer
The absolute advantage in producing a good implies that the country has highest productivity in producing that particular good. If a country has comparative advantage in production of a good then the country has lower opportunity cost of producing that good. Nations that produce according to their comparative advantage are maximizing the benefits that they receive from trade and consequently, their national welfare. The benefit that one country accrues from trade is called gains from trade.
Therefore, the corretc option is
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2.
The absolute advantage in producing a good implies that the country has highest productivity in producing that particular good. If a country has comparative advantage in production of a good then the country has lower opportunity cost of producing that good. Nations that produce according to their comparative advantage are maximizing the benefits that they receive from trade and consequently, their national welfare. The benefit that one country accrues from trade is called gains from trade..
The correct option is
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