Which of the Following Statements About a Trade Bloc Is

question 53

Multiple Choice

Which of the following statements about a trade bloc is accurate?

• A)The gains from a trade bloc are shared equally by each member.
• B)Increased competition within a trade bloc can result in higher commodity prices in the domestic markets of the member countries.
• C)A trade bloc may lower firms' costs by allowing them to exploit economies of scale.
• D)A trade bloc can increase the opportunities for domestic business investments but usually repels foreign direct investments into the member countries.

Clarify misconceptions regarding government purchases, taxes, and public saving in a closed economy.

Analyze the effects of fiscal policy on loanable funds, interest rates, and investment.

Distinguish between different financial instruments and their roles in the economy.

Assess the implications of government budget deficits and surpluses on long-run economic growth and interest rates.

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Definitions:

Inventory Turnover

A financial metric indicating how many times a company has sold and replaced its inventory over a specific period.

Quick Ratio

Current assets less inventories divided by current liabilities. A financial ratio that measures a firm’s liquidity, the ability to pay its bills in the short run, without depending on converting inventory into cash. Also called the Acid Test.

Current Ratio

The Current Ratio is a financial metric used to evaluate a company's ability to pay its short-term liabilities with its short-term assets, indicating liquidity.

Prepaid Items

Expenses paid in advance for goods or services to be received in the future.