CFA Practice Question

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CFA Practice Question

A nation's comparative advantage in the production of an item is determined by ______
A. which country has already specialized in the production of the item.
B. the opportunity cost of producing the item relative to a trading partner's opportunity cost.
C. wage rates and other input costs.
Explanation: A country with a comparative advantage in the production of a good produces that good at a lower opportunity cost than does its trading partner.

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