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In Moving from a No- Trade to a Free- Trade

Question 10

Multiple Choice

In moving from a no- trade to a free- trade situation, a country will


A) import those goods which are acquired more cheaply through trade than through domestic production.
B) expect a decrease in the average standard of living, but will see increased profits for firms in the export business.
C) experience an increase in its average standard of living only if it begins with an absolute advantage in the production of all goods.
D) be consuming inside its production possibilities boundary.
E) experience increases in employment in all industries.

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