Which of the following statements about the global marketplace is correct?

• A. Participation in the global marketplace always leads to equal economic growth among all countries.
• B. The global marketplace eliminates the need for exchange rates.
• C. The global marketplace prevents the flow of goods and services between countries.
• D. The global marketplace allows countries to specialize in the production of goods and services in which they have a comparative advantage.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of the global marketplace, which refers to the international economic environment where countries trade goods, services, and capital across borders.
2. Step 2: Recognize that participation in the global marketplace does not guarantee equal economic growth among all countries because growth depends on various factors such as resources, policies, and comparative advantages.
3. Step 3: Know that exchange rates are necessary in the global marketplace to facilitate trade between countries with different currencies, so the global marketplace does not eliminate the need for exchange rates.
4. Step 4: Understand that the global marketplace encourages, rather than prevents, the flow of goods and services between countries, promoting international trade and economic interdependence.
5. Step 5: Identify that the correct statement is that the global marketplace allows countries to specialize in producing goods and services in which they have a comparative advantage, meaning they can produce at a lower opportunity cost than others, leading to more efficient global production and trade.