-If the Economy in the Diagram Above Is Open to Trade

question 1

Multiple Choice

-If the economy in the diagram above is open to trade and the world price of oil is $25 per barrel,then this economy will _________ million barrels of oil.

• A) export 6
• B) export 8
• C) export 10
• D) import 10
• E) import 6

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in the net profit or loss for that period.

Insurance Expense

The cost incurred by an entity to obtain insurance coverage, recognized as an expense over the period the insurance protection is provided.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to reinvest in its core business or to pay debt.

Adjusted Trial Balance

An adjusted trial balance is a list of all the accounts of a company, including any adjustments, showing the final balances to be used for preparing financial statements.