Comparative advantage indicates that:
a. specialization and exchange will cause trading partners to reduce their joint output.
b. a nation can gain from trade even when it is at an absolute disadvantage in producing all goods.
c. trade with low-wage countries will pull down the wages of workers in high-wage countries.
d. all of these.
b
You might also like to view...
At full employment, the expected inflation rate is
A) higher than the inflation rate. B) unrelated to the inflation rate. C) equal to the inflation rate. D) lower than the inflation rate. E) unknown.
Consider the market for capital equipment. Suppose the price of firms' output increases. Holding all else constant, the equilibrium rental price of capital equipment will
a. increase. b. decrease. c. not change. d. It is not possible to determine what will happen to the equilibrium rental price of capital equipment.