When a Nation First Begins to Trade with Other Countries

question 271

Multiple Choice

When a nation first begins to trade with other countries and the nation becomes an importer of corn,

• A)this is an indication that the world price of corn exceeds the nation's domestic price of corn in the absence of trade.
• B)this is an indication that the nation has a comparative advantage in producing corn.
• C)the nation's consumers of corn become better off and the nation's producers of corn become worse off.
• D)All of the above are correct.

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Definitions:

Capital Stock

The total amount of shares that a company is authorized to issue, representing ownership in the company.

Accounts Receivable

Outstanding payments from clients to a company for delivered services or products.

Direct Method

A way of reporting cash flows from operating activities in which major classes of gross cash receipts and payments are disclosed.

Cash Received

The actual amount of money received by a company during a specific period, including from sales, services, loans, investments, and other sources.