Developing Countries Do

question 51

Multiple Choice

Developing countries do:

• A)not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place.
• B)not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs.
• C)compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
• D)compete with one another for foreign investment, and this competition reduces the benefits from foreign investment.

Analyze the effects of tariffs and trade agreements on international trade.

Comprehend the principle of comparative advantage and its application to international trade.

Recognize the factors influencing trade deficits and surpluses, including the role of services and goods.

Identify the opportunity costs associated with trade and how they differ between countries.

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Definitions:

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific cost object, such as a department or product.

Net Operating Income

A company's gross income minus operating expenses, excluding taxes and interest charges, giving insight into the operational efficiency of the company.

Contribution Margin Ratio

The percentage of each sale that exceeds the variable costs and contributes to covering fixed costs and generating profit.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific business segment or product.