If All Countries Try to Expand Their Exports and Restrict

question 49

Multiple Choice

If all countries try to expand their exports and restrict their imports through the use of export subsidies and import tariffs, the net effect will probably be

• A)an increase in the volume of trade but little change in unemployment levels.
• B)a fall in the volume of trade and an increase in the standard of living in each country.
• C)no change in the volume of trade but less unemployment.
• D)a fall in the volume of trade and a decline in the average living standards in each country.
• E)no change in the volume of trade but an increase in the overall unemployment rates.

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Definitions:

Market Price Approach

The market price approach is a method used to value assets based on the current market price of similar or identical assets.

Transfer Price

The price at which goods and services are transferred between departments or subsidiaries of the same company.

Cost Price Approach

A pricing methodology where the selling price of a product is determined by adding a markup to its total cost of production or acquisition.

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.