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Flashcards in Statements/trade Deck (5)
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1

Positive Statement

facts; objective; can be tested; can be true/correct or false/incorrect.

2

Normative Statement

opinions; subjective; can not be tested; can agree or disagree, not correct/right or incorrect/wrong.

3

Absolute advantage

the situation where one country can produce a product using fewer resources than another country

4

Comparative advantage

the situation where one country can produce a product at a lower opportunity cost than other country

5

Five steps when analysing comparative advantages

1. calculate opp.cost
2. draw PPC
3. calculate self sufficiency
4. calculate specialisation
5. draw exchange rate diagram