Bordunia Is a Country That Is Abundant in Iron Ore

question 53

Multiple Choice

Bordunia is a country that is abundant in iron ore. It has developed extensive trade relations with Calzonia, a neighboring country that is rich in oil. Bordunia, however, has limited trade relations with Graznesia, which is equally rich in iron ore. The given scenario reinstates the validity of the _____.

• A) Ricardian trade theory
• B) theory of economies of scale
• C) Heckscher-Ohlin theory of trade
• D) theory of overlapping demand

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Definitions:

Adjusting Entry

An update to the books of accounts to allocate incomes and expenses to the appropriate accounting period.

Fiscal Period

Refers to any period used for accounting purposes, typically a year, which can either align with the calendar year or be a different 12-month period.

Insurance

A financial product sold by insurance companies to safeguard against financial losses from specific risks, such as accidents, theft, or natural disasters.

Adjusting Entry

An accounting entry made in the journals at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.