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Two Nations Want to Engage in Trade but Discover That

Question 9

Multiple Choice

Two nations want to engage in trade but discover that one of them is more efficient in producing all goods. In this case,


A) no trade is possible.
B) the more efficient country should produce all goods and export them.
C) the more efficient country should import all goods.
D) the less efficient country should engage in importation of goods only.
E) each nation should export the good in which it has a comparative advantage.

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