The principle of comparative advantage suggests that governments should pursue free trade because it ______.
a. equitably distributes human capital worldwide
b. enables countries to grow their economies through specialization
c. prevents poor countries from pursuing technological advances
d. reduces pressure on the economies of countries that have few natural resources
b. enables countries to grow their economies through specialization
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Intra-industry trade will tend to dominate trade flows when which of the following exists?
A) small differences between relative country factor availabilities B) large differences between relative country factor availabilities C) homogeneous products that cannot be differentiated D) constant cost industries E) uneven distribution of abundant resources between two countries
The official number of poor in the United States
A) is higher today than at any other time in our history. B) has risen steadily since 1981. C) was lowest in the late 1960s. D) is lowest today.