Which of the Following Is True of Product Cycle Hypothesis

question 55

Multiple Choice

Which of the following is true of product cycle hypothesis?

• A)It explains how a country completely specializes in the production of the good that was first invented in this country.
• B)It ignores the importance of research and development in the improvement of production technology in a country.
• C)It explains how an initial exporter of a good ends up importing the good from other countries.
• D)It assumes that the demands for various commodities in the countries do not change over time.

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Definitions:

Identifiable Net Assets (INA) Method

is a technique used in business combinations to value the acquired company by summing the fair values of its identifiable assets and liabilities.

Proportionate Consolidation Method

An accounting technique used for joint ventures, where an entity's share of each of the assets, liabilities, income, and expenses are combined line by line with similar items in the entity's financial statements.

Non-Controlling Interest (NCI)

It represents the equity in a subsidiary not attributable, directly or indirectly, to the parent company.

Proportionate Consolidation Method

A method of accounting where a parent entity combines its share of the subsidiary's assets, liabilities, incomes, and expenses line by line into its financial statements.