In the Specific­factors Model, Suppose That the Home

question 84

Multiple Choice

In the specific­factors model, suppose that the Home
Country has a comparative advantage in agricultural
Output.What will happen to the amount of capital used
In agricultural production when trade occurs?

• A)It will fall.
• B)It will rise.
• C)It will not change.
• D)It will first fall, then rise.

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Definitions:

Capital Gains

The profit from the sale of an asset or investment when the selling price exceeds its purchase price.

Quick Conversion

A process or strategy designed to rapidly convert assets or inventory into cash.

Yields

The yield from an investment, like dividends or interest earned, shown as a percentage of the investment's original cost or its current market value.

Liquidity

The simplicity of transforming an asset or security into cash without impacting its market value.