The Basic Proposition in International Trade Is That

question 268

Multiple Choice

The basic proposition in international trade is that

• A) trade is determined by absolute advantage.
• B) in the long run, imports are paid for by exports.
• C) everyone is made better off by free trade.
• D) fair trade is more important than free trade.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Post-Closing Trial Balance

A listing of all balance sheet accounts with balances after closing entries are made, used to verify the equality of debits and credits.

Current Ratio

A financial metric comparing a company's current assets to its current liabilities to assess liquidity.

Short-Term Solvency

A company's ability to meet its short-term obligations, often assessed using liquidity ratios.