6.The idea that countries should produce and sell goods that they produce most effectively
and efficiently, and buy goods that other countries produce most effectively and efficiently,
is known as
A. absolute advantage theory. C. efficiency balanced trade.
B. free trade. D. comparative advantage theory.
my answer are :
6:C
7:B
8: B or D but i think its B
7. These days, the leading commercial firms are found in the _______ sector.
A. manufacturing C. service
B. agricultural D. government
8. In global trade, when the difference between money coming into a country from exports
and money leaving a country due to imports or money flows from other factors is
known as the
A. balance of payments. C. balance of trade.
B. trade offset. D. trade deficit.
For question 6, the correct answer is D. comparative advantage theory.
To understand why, you can break down each option:
A. Absolute advantage theory: This theory suggests that countries should produce goods in which they have an absolute advantage, meaning they can produce them more efficiently than other countries. While related to the concept of comparative advantage, it is not the same thing.
B. Free trade: Free trade is a broader concept that advocates for the removal of trade barriers and restrictions between countries, allowing for the exchange of goods and services without tariffs or quotas. It does not specifically address the idea of producing and selling goods based on efficiency.
C. Efficiency balanced trade: This is not a commonly known term in economics, so it is not the correct answer.
D. Comparative advantage theory: This theory states that countries should specialize in producing and exporting goods in which they have a comparative advantage, meaning they can produce them at a lower opportunity cost than other countries. It also suggests that countries should import goods in which other countries have a comparative advantage. This is the correct answer in this case.
For question 7, the correct answer is C. service.
This answer is based on current trends and the nature of the global economy. Manufacturing and agricultural sectors have faced competition from countries with lower labor costs and can often be outsourced. Government is not a commercial firm. However, the service sector, which includes industries like finance, technology, healthcare, and hospitality, has grown significantly in recent years and is often where the leading commercial firms are found.
For question 8, the correct answer is A. balance of payments.
To understand why, we can examine the other options:
C. Balance of trade: This term refers specifically to the difference between the value of a country's imports and exports of physical goods. It does not account for other financial flows such as money coming into or leaving a country due to services, investments, or remittances.
B. Trade offset: This term is not commonly used in economics and does not specifically capture the concept described in the question.
D. Trade deficit: This term refers to a situation where a country's imports exceed its exports, resulting in a negative balance of trade. While related to the concept in question, it does not encompass the broader financial flows included in the correct answer.
A. Balance of payments: This term encompasses all financial transactions between a country and the rest of the world, including imports, exports, services, investments, and transfers. It provides a comprehensive view of a country's economic transactions with other nations and is the correct answer in this case.