Country a Produces Shoes at a Lower Cost Than the Country

question 44

Essay

Country A produces shoes at a lower cost than the country B. As a result, most of the shoes purchased in the country B are made in country A. Explain how trading with country A results in a net gain for country B?

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Definitions:

Electronic Transfers

The movement of funds between bank accounts through digital means, often executed via online banking platforms or electronic payment systems.

Negotiability

The characteristic of a financial instrument that allows it to be transferred from one party to another in a form of exchange.

Holder in Due Course

A term referring to a party who has acquired a negotiable instrument in good faith and for value, and thus has certain protections.

Marketability

The ease with which an asset or security can be sold or bought in the market without affecting its price.