In Order for Mutually Beneficial Trade to Occur Between Two

question 217

Multiple Choice

In order for mutually beneficial trade to occur between two otherwise isolated nations,

• A) each nation must be able to produce at least one good absolutely cheaper than the other.
• B) each nation must be able to produce at least one good relatively cheaper than the other.
• C) each nation must face constant costs in the production of the good it exports.
• D) one nation's production must be labor-intensive, while the other nation's production is capital-intensive.

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Definitions:

Reverse Stock Split

A reverse stock split is a consolidation of shares that decreases the total number of outstanding shares and increases the share price proportionately.

Market Value

The existing price for buying or selling an asset or service in the marketplace.

Retained Earnings

The portion of a company's profits that are kept and not paid out as dividends to shareholders, often reinvested into the business.

Special Dividend

A one-time distribution of earnings to shareholders, outside of the regular dividend schedule.