Factor Price Equalization Theory,states That When Factors Are Allowed to Move

question 45

True/False

Factor price equalization theory,states that when factors are allowed to move freely among trading nations,efficiency increases,which leads to superior allocation of production of goods and services among countries.

---

Definitions:

Monetary Tool

Instruments used by central banks to control the supply of money in the economy, impacting interest rates and overall economic activity.

Open-Market Operations

These are actions, like buying or selling government bonds, undertaken by central banks to control the money supply and interest rates.

Price-Earnings Ratios

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or undervalued.

S&P 500 Index

An American stock market index based on the market capitalizations of 500 large companies listed on stock exchanges in the United States.