Suppose There Are Two Countries (Home and Foreign) That Produce

question 115

Multiple Choice

Suppose there are two countries (Home and Foreign) that produce two
Goods.Home's wages are 100% greater than Foreign's wages.Will trade
Be possible between Home and Foreign?

• A)No, because Foreign's wages are lower than Home's wages.
• B)Yes, Foreign will be able to export both products to Home.
• C)Yes, as long as Home's marginal productivity of labor in one product is at least 100% higher than Foreign's marginal productivity of labor in
• The same product.
• D)No, because prices will be the same in each country.

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Definitions:

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, presenting the assets, liabilities, and equity of the entire group as if it were a single entity.

Affiliated Companies

Affiliated companies are those that are connected or associated with each other through common ownership, control, or influence, but are not fully integrated as a single entity.

Consolidated Total

Combined total figures that merge the financial statements of a parent company and its subsidiaries into one comprehensive financial statement.

Equity Methods

An accounting technique used to record investments in associate companies, where the investment is initially recorded at cost and adjusted according to the investor's share of the investee's profits or losses.