Final answer:
The economic terms like absolute advantage, comparative advantage, currency appreciation, currency depreciation, outsourcing, and specialization relate to various aspects of international trade and economics. Each term corresponds to specific situations such as production capability, currency value fluctuations, business practices, and efficiency in trade.
Step-by-step explanation:
Matching the correct economic term with each scenario involves understanding the concepts of absolute advantage, currency appreciation, currency depreciation, outsourcing, specialization, and comparative advantage. For instance:
- Absolute advantage occurs when one country can use fewer resources to produce a good compared to another country. An example would be Brazil having an absolute advantage in producing beef compared to other countries.
- Currency appreciation is when the value of a country's currency increases relative to other currencies. This could occur if the demand for that country's currency increases.
- Currency depreciation happens when the demand for the country's currency would decrease, thus lowering the exchange rate.
- Outsourcing is the business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company's own employees.
- Specialization refers to the concentration of the productive efforts of individuals and firms on a limited number of activities, leading to increased efficiency and production levels.
- Comparative advantage is the ability of a country to produce a particular good at a lower opportunity cost than another country, facilitating beneficial trade when countries specialize in the production of goods where they have a comparative advantage.
Understanding these terms helps identify the benefits of trade by considering opportunity costs and the production costs associated with comparative advantage.