-Refer to above figure. If trade were to open up between P and R, where would the terms of trade locate in the figure above (somewhere on the PC/PF axis)?
Would relative wages (w/r) in the two countries become equal?
Is this consistent with the Heckscher-Ohlin model?
Explain.
Definitions:
Acquisition
Agreement in which one company purchases another.
Leverage
Increasing the rate of return on funds invested by borrowing funds.
Return
The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.
Risk
Uncertainty about loss or injury.
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