Advanced Placement (AP), 23.03.2021 18:00, 20heldmadison
Which of the following best explains a trading relationship between two countries based on comparative advantage?
A. One country exports raw materials and the other country exports manufactured goods, resulting in a global economic balance.
B. One country implements tariffs on goods that are imported from another country because the importing country will benefit from profits on the sale of the goods.
C. Each country specializes in the type of good for which it has the lowest opportunity cost, resulting in a higher global output of both types of goods.
D. Two countries trade in luxury items, but the volume of trade is limited by the highest cost of long-distance trade.
E. Each country exports the same type of good because the countries are similar in terms of natural resources and labor costs.
Answers: 1
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Which of the following best explains a trading relationship between two countries based on comparati...
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