According to the Factor Price Equalization Theorem,if Country B Is

question 46

Multiple Choice

According to the factor price equalization theorem,if country B is labor abundant,then if country B initiates trade with country A

• A)wages and rents should fall in A.
• B)rents and rents should rise in A.
• C)wages should rise and rents should fall in A.
• D)wages should fall and rents should rise in A.

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Definitions:

Cash-flow Hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with an asset or liability or a forecasted transaction.

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services.

Fair-value Hedge

A hedge of the exposure to changes in the fair value of an asset or liability or an unidentified firm commitment that could affect profit or loss.

Drilling Machine

A tool used for making holes in various materials, part of machinery equipment.