Which of the Following Is a Major Limitation of the Simple
Which of the following is a major limitation of the simple Ricardian model of comparative advantage?
A) The model ignores the principle of diminishing marginal returns.
B) The model recommends excessive governmental intervention in trade.
C) The outcome of the model suggested by Ricardo is a zero-sum game.
D) The model is against the idea of engaging in free trade with nations.
What will happen,according to Paul Samuelson's critique,if a rich country enters into a free trade agreement with a poor country?
A) Both the countries will incur losses due to the exchanges between them.
B) The productivity of the poor country will decline rapidly.
C) The poor country will rapidly improve its productivity.
D) Both the countries will garner benefits from the exchanges between them.
Which of the following arguments supports the Paul Samuelson's critique?
A) A rich country cannot produce net gains by engaging in free trade with a poor country.
B) Governmental intervention will reduce the likeliness of countries' economic success.
C) Countries should attempt to specialize in the production of goods and services.
D) Trade is a positive-sum game in which all countries that participate realize economic gains.
Which of the following terms refers to the extent to which a country is gifted with such resources as land,labor,and capital?
A) Current accounts
B) Factor endowments
C) National balance
D) National accounts