It Is Not Possible for One Country to Sell All

question 113

Multiple Choice

It is not possible for one country to sell all products more cheaply than other countries for any length of time because the

• A)the principle of absolute advantage would then be violated.
• B)exporting country will find its cost of production decreasing relative to the importing country.
• C)depreciation of the exporting country's currency will lead to trade in both directions.
• D)depreciation of the importing countries' currencies ensures that trade will flow in both directions.
• E)importing countries will react by constructing severe trade barriers.

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Definitions:

Permanent Working Capital

The minimum amount of working capital that a company needs to operate continuously.

Long-Term Debt

Borrowings by a company that are due for repayment after one year or more.

Tax Breaks

A reduction in the amount of taxes that an individual or company owes to the government, often used to incentivize certain behaviors or investments.

Net Working Capital

Net working capital is a financial metric that represents the difference between a company's current assets and current liabilities.