When a Nation Exports a Good or Service in Which

question 205

Multiple Choice

When a nation exports a good or service in which it has a comparative advantage,employment in that industry

• A) decreases.
• B) stays the same.
• C) increases.
• D) might change, but more information about what else the country exports is needed to determine if employment increases, decreases, or does not change.
• E) might change, but more information about what the country imports is needed to determine if employment increases, decreases, or does not change.

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Definitions:

Estimated Growth Rate

The projected rate at which a company, economy, or investment is expected to grow.

Cost of Capital

The cost of funds used for financing a business, typically expressed as a rate of return that the company must earn before generating value.

Market Risk Premium

The additional return that investors require for assuming the risk of investing in the stock market over a risk-free rate.

Beta

A tool for determining the instability, or systematic risk, present in a security or a portfolio when measured against the general market.