Bob Traps Lobsters in Maine and Sells Them to a Restaurant

question 194

Multiple Choice

Bob traps lobsters in Maine and sells them to a restaurant in Mexico. Other things the same, these sales

• A)increase U.S. net exports and has no effect on Mexican net exports.
• B)increase U.S. net exports and decrease Mexican net exports.
• C)decrease U.S. net exports and have no effect on Mexican net exports.
• D)decrease U.S. net exports and increase Mexican net exports.

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Definitions:

Organizational Expenses

Costs associated with forming a corporation, partnership, or other types of entities, such as legal fees and state filing fees.

Common Stock

A type of security that signifies a share of ownership in a corporation, known as corporate equity ownership.

Issue Price

The price at which a new security is offered to the public for sale when it is issued.

Par of Common Stock

The stated face value of a common stock as specified in the corporate charter, which has little relation to the stock’s market value.