Test 1 Flashcards
1
Q
absolute advantage refers to____
A
the country with the highest labor productivity
2
Q
comparative advantage refers to
A
the country that can make the good at a lower opportunity cost in reference to the other good being produced
3
Q
who developed the theory of absolute advantage
A
adam smith
4
Q
who developed the theory of comparative advantage
A
David Ricardo
5
Q
what creates a opportunity for arbitrage
A
when their is a price difference between the markets of two countries for an item when no free trade is allowed
6
Q
trade deficit =
A
= exports - imports
7
Q
GDP growth equation :
A
FV = PV(1+r)t
8
Q
A
