Globalization Has Made Economies of Scope

question 117

Multiple Choice

Globalization has made economies of scope:

• A) more important to firms because global corporations can segment the production process.
• B) more important to firms because global corporations do not have to segment the production process.
• C) less important to firms because global corporations can segment the production process.
• D) less important to firms because global corporations do not have to segment the production process.

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Definitions:

Recessionary Gap

Occurs when the actual output of an economy is less than the potential output, indicating underutilized resources.

Actual Output

The actual total value of goods and services produced by an economy over a specific period.

Potential Output

Potential output refers to the maximum amount of goods and services an economy can produce when it uses its resources fully and efficiently, without prompting inflation.

Cash Conversion Cycle

A metric that expresses the duration (in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales.