Suppose a U

question 61

Multiple Choice

Suppose a U.S. computer company outsources its technical-support services to India. This will cause

• A) the demand for labor in the United States to fall, lowering U.S. wage rates, and the demand for labor in India to increase, increasing Indian wage rates.
• B) the demand for labor in the United States to increase, lowering U.S. wage rates, and the demand for labor in India to fall, increasing Indian wage rates.
• C) the demand for labor in the United States to fall, lowering U.S. wage rates, and the demand for labor in India to fall, decreasing Indian wage rates.
• D) the demand for labor in the United States to increase, increasing U.S. wage rates, and the demand for labor in India to fall, decreasing Indian wage rates.

---

Definitions:

Convertible Debt

A type of bond or other form of debt that can be converted into a specified number of shares of the issuing company's stock at certain times during its life.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards, principles, and procedures that companies must follow when compiling their financial statements.

APB

The Accounting Principles Board, which was an organization that set standards for financial reporting and accounting in the past, succeeded by the FASB.

Effective Interest Method

A technique used in finance to calculate the actual interest rate on a bond or loan, considering compounding over the term.