Economic Interdependence and Comparative Advantage Quiz

Economic interdependence emphasizes collaboration among nations for mutual benefit.

Nations should prioritize producing goods with the least opportunity cost to maximize gains from trade.

The primary objective of international trade under the theory of comparative advantage is to enhance overall economic well-being.

Comparative advantage highlights efficiency in resource utilization for goods production.

David Ricardo is the economist known for formulating the concept of comparative advantage.

Absolute advantage underscores a nation's ability to produce a good more efficiently with given resources compared to others.

Trade barriers are policies hindering the unrestricted movement of goods and services across borders.

Economic interdependence is strengthened through the integration and reliance on global supply chains.

Over-reliance on economic interdependence can lead to susceptibility to shocks propagating across interconnected economies.

Leveraging comparative advantage results in reduced opportunity costs for goods production.

Import quotas are non-tariff measures limiting the quantity of imported goods.

The WTO fosters economic interdependence by mediating trade negotiations and resolving conflicts between member nations.

Political instability or conflict can disrupt the smooth functioning of economic interdependence among nations.