Assume That Only Two Countries, a and B, Exist

question 44

Multiple Choice

Assume that only two countries, A and B, exist.

-Refer to the table above. If you are told that Country B is very much richer than Country A, then the correct answer is

• A) country B will export good S.
• B) country A will export good S.
• C) both countries will export good S.
• D) trade will not occur between these two countries.
• E) both countries will import good S.

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Definitions:

Dividends

Distributions from a company's earnings to its shareholders, typically originating from the firm's profits.

Intrinsic Value

The actual value of a company, asset, or currency determined through fundamental analysis without reference to its market value.

Return

The gain or loss made on an investment over a specified period, typically expressed as a percentage of the investment’s initial cost.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively a company uses investments to generate earnings growth.