If Labor-Intensive Textile Products Could Be Produced More Cheaply in Low-Wage

question 44

Multiple Choice

If labor-intensive textile products could be produced more cheaply in low-wage countries than in the United States, the United States would gain if it

• A) levied a tariff on the goods produced by the cheap foreign labor.
• B) subsidized the domestic textile industry so it could compete in international markets.
• C) used its resources to produce other items while importing textiles from foreigners.
• D) levied a tax on the domestic textile products to penalize the industry for inefficiency.

Understand and calculate the expected rate of return on stocks and portfolios under different economic conditions.

Comprehend the concept of standard deviation and its application in evaluating the risk of a portfolio.

Grasp the concepts of market risk premium, risk-free rate, and their roles in the investment decision-making process.

Learn the principle of diversification and its impact on portfolio risk.

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Definitions:

Market

A place or platform where buyers and sellers come together to trade goods, services, or financial instruments.

Monopoly

A market structure characterized by a single seller, selling a unique product in the market with restrictions on the entry of new firms.

Law of Demand

An economic principle stating that as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa, holding all else constant.

Prices

The amount of money required to purchase goods or services, typically set by supply and demand dynamics in the market.