New Zealand Is More Productive Than Madagascar at Producing All

question 235

Multiple Choice

New Zealand is more productive than Madagascar at producing all goods and services. In this situation:

• A) New Zealand might benefit by trading with Madagascar.
• B) Madagascar would be harmed if it traded with New Zealand.
• C) both countries would benefit from trading with each other.
• D) New Zealand would see its standard of living decline if it traded with Madagascar.

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Definitions:

Stock Index

A measurement of a section of the stock market calculated from the prices of selected stocks, representing a specific market or sector.

Futures Contracts

Financial contracts obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price.

Electronic Networks

Systems or platforms that facilitate the trading of financial instruments, such as stocks and currencies, digitally and without a physical trading floor.

Trading Pits

Physical locations on the floor of some exchanges where traders use open outcry and hand signals to buy and sell commodities or financial instruments.