We Benefit from Trade If We Are Able to Obtain

question 71

Multiple Choice

We benefit from trade if we are able to obtain a good from a foreign country:

• A)that has a very low domestic demand.
• B)the production of which requires a steady supply of unskilled labor.
• C)by giving up less of other goods than we would have to give up to obtain the good at home.
• D)by giving up more of other goods than we would have to give up to obtain the good at home.
• E)that has a substantial number of substitutes in the domestic market.

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Definitions:

Capital Investment Analysis

The process by which management plans, evaluates, and controls long-term capital investments involving property, plant, and equipment.

Fixed Assets

Fixed Assets are long-term tangible assets purchased for use in business operations, intended to be used for more than one accounting period.

Long-term Investment

Investments made by a company to hold for more than one year, often in bonds, stocks, or real estate.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.