The Gains from Free Trade Are Enjoyed by a ________

question 201

Multiple Choice

The gains from free trade are enjoyed by a ________ number of people and the costs of free trade are imposed by a ________ number of people.

• A) small; large
• B) large; small
• C) small; small
• D) large; large

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Definitions:

Controlling Interest

Ownership of a portion of a company that is large enough to influence or control its operations and decisions, typically over 50% of the voting rights.

Equity Contribution

Capital provided by owners or shareholders to a firm in exchange for an ownership interest or stock.

Initial Investment

The initial amount of capital used to start a business or investment.

Commercial Substance

A scenario where the future cash flows of an asset or group of assets are expected to change significantly due to a transaction.