Assume a Country Agrees to a Free-Trade Act with Another

question 44

Multiple Choice

Assume a country agrees to a free-trade act with another country.In the process,some individuals are displaced from their jobs,thus the free-trade act results in a negative externality.

• A) False
• B) True
• C) Only if those who were displaced are not compensated with another job or income transfer.
• D) Only if those who were displaced were compensated with another job or income transfer.

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Definitions:

Government Securities

Debt instruments issued by a government to raise funds from the public.