When a Rich Country That Has Absolute Advantages in All

question 75

Multiple Choice

When a rich country that has absolute advantages in all products begins trading with a poor country:

• A) the wage in the rich country will go down and the wage in the poor country will go up.
• B) the wages in both countries will go up.
• C) the wages in both countries will go down.
• D) the wage in the rich country will go up and the wage in the poor country will go down.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thereby possessing certain rights and responsibilities.

Charter

A legal document that establishes a corporation or city, outlining its rights, privileges, and purposes.

Par Value

The face value of a bond or stock as stated by the issuing company, which may differ from its market value.

Authorization

The official permission or power to do something, often formally granted by a higher authority.