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If Two Nations Want to Trade with One Another, They

Question 64

Multiple Choice

If two nations want to trade with one another, they can determine their respective comparative advantages by


A) hiring economists to gather and interpret the relevant data.
B) computing the opportunity costs of all goods and services.
C) first determining which has absolute advantage in the production of goods and services.
D) allowing firms in each country to freely engage in international trade.
E) making certain that the prices of tradable goods and services are equal in both nations.

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