David Ricardo's Simplified Trade Model Assumes All of the Following

question 66

Multiple Choice

David Ricardo's simplified trade model assumes all of the following EXCEPT

• A) trade is balanced, thus ruling out money flows between nations.
• B) firms make production decisions in an attempt to maximize profit.
• C) transportation costs are zero.
• D) tariffs and quotas are used to protect a nation's producers from foreign competition.

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Definitions:

Money Orders

Financial instruments issued for a specific amount of money, acting as a safe alternative to cash or personal checks.

Cash

Money in the form of currency that can include coins, currency notes, and sight deposits at financial institutions.

Sarbanes-Oxley

A U.S. law passed in 2002 to protect investors from fraudulent financial reporting by corporations.

Internal Controls

Procedures and mechanisms implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.