​Suppose That You Are Planning to Buy a New Cellphone

question 183

Multiple Choice

​Suppose that you are planning to buy a new cellphone. Your choice is a new Samsung phone or HTC model. Samsung phones are manufactured in Korea and HTC phones are manufactured in Taiwan. Assuming that the price of each phone is the same, will your purchase of the Samsung or the HTC affect U.S. GDP differently?​

• A)​No, both have the same impact: your purchase will increase consumption expenditures and decrease net exports by the same amount.
• B)​Yes. This depends upon which cellphone carrier you choose.
• C)​No, because Samsung's production only affects Korea's GDP; and HTC's production only impacts Taiwan's GDP.
• D)Yes. The country from which a product is imported has different effects on U.S. GDP because it depends upon trade agreements with the countries.

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Definitions:

Hypercompetition

A condition in the market characterized by rapid and intense competitive moves, where advantages are quickly eroded.

Intermittent Profits

Earnings that are not consistent or regular, often fluctuating due to various external or internal factors.

Competitive Advantage

An attribute or set of attributes that allows an organization to outperform its competitors.

Sustainable Competitive Advantage

Sustainable competitive advantage exists through realising cost and quality, knowledge and speed, creating a market stronghold and protecting financial resources.