Given Free Trade, Small Nations Tend to Benefit the Most

question 193

Multiple Choice

Given free trade, small nations tend to benefit the most from trade since they

• A) are more productive than their large trading partners.
• B) are less productive than their large trading partners.
• C) have demand preferences and income levels lower than their large trading partners.
• D) enjoy terms of trade lying near the opportunity costs of their large trading partners.

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Definitions:

Equity Market

The marketplace where shares of companies are bought and sold, facilitating capital raising for listed companies and investment opportunities for buyers.

World Equity

Investments in equities or stocks from companies all around the globe, aiming to achieve diversified global exposure.

Future Rate

An anticipated interest rate or exchange rate in financial markets that is expected to prevail in the future, as opposed to the current or spot rate.

Canadian Bill

A short-term government security issued by the Canadian government, similar to treasury bills in the United States.