-Refer to Table 3-5

question 119

Multiple Choice

-Refer to Table 3-5. Which country has an absolute or comparative advantage in each product?

• A) Japan has a comparative advantage in airplanes, and Canada has an absolute advantage in cars.
• B) Japan has a comparative advantage in cars, and Canada has an absolute advantage in airplanes.
• C) Japan has a comparative advantage in cars, and Canada has an absolute advantage in neither good.
• D) Japan has a comparative advantage in airplanes, and Canada has an absolute advantage in both goods.

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Definitions:

Call Provision

Right of the issuer to buy a bond back from the investor before maturity at a specified price.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Mortgage Pass-Through

A type of security that pools mortgage loans and passes the principal and interest payments from borrowers to investors.

Mortgage Loans

Long-term loans used to purchase real estate property, secured by the property itself.