International trade occurs whenever
a. two nations have achieved internal economic efficiency
b. one of the trading nations is self-sufficient
c. one nation can profit from trade at the expense of another
d. two nations can benefit from trading with each other
e. labor is cheaper in one country than in another
D
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The first example used to explain comparative advantage used two countries (England and Portugal) and two goods (wine and cloth) to show that
A) each country would be better off from trade if it had an absolute advantage in producing one of the goods. B) each country would have a comparative advantage in the production of the good for which it had an absolute advantage. C) mutually beneficial trade was possible between two countries even if one had a comparative advantage in the production of both goods. D) mutually beneficial trade was possible between two countries even if one had an absolute advantage in the production of both goods.
The data for the U.S. show that investment and profits
A) have a strong negative relationship. B) are positively related during recessions, and negatively related during expansions. C) move independently. D) are positively related during expansions, and negatively related during recessions. E) none of the above