20
QuizMultiple Choice

Topic Test

Question 20 • FowU - Financial Math - B

What is a consequence of following the Comparative Advantage Principle?

Answer
A
Countries only make one kind of good or service.
B
Wages scale to exactly match the skill of the wage-earners.
C
Countries become more interdependent on one another for goods and materials.
D
Goods are traded directly, rather than using monetary trade.

Explanation

The Comparative Advantage Principle encourages countries to specialize in producing goods they can make at a lower opportunity cost, then trade with other countries. Because each country relies on others for some goods and materials, they become more interdependent. The correct choice is “Countries become more interdependent on one another for goods and materials.”

AI-written and checked against the verified answer.

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