Question 5 2 pts Stocks and bonds are examples of physical c

Question 5 2 pts Stocks and bonds are examples of: physical capital. financial labor. internal capital. financial capital. natural resources Question 6 2 pts Specialization according to comparative advantage followed by free trade makes every economy better off. True False

Solution

Q5) Answer: These are financial capital.

Stocks, such as common stocks and preferred stocks, are ownership capital. Bonds are debt capital, because there are definite repayment schedules.

Q6) Answer: True

Comparative advantage: This is the comparison between the two countries of which one country has lower opportunity cost than other. Such country is specialized in that work and should produce the good for exporting it to other country. Both the countries would be benefited by such trade.