Under What Circumstance Does a Country Specialize in Order to Use

question 238

Multiple Choice

Under what circumstance does a country specialize in order to use resources more efficiently?

• A) when there is comparative advantage in production
• B) when there is an absolute advantage in production
• C) when there is disincentive to trade with others
• D) when there is a higher opportunity cost to trade with others

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Definitions:

Accumulated Depreciation

The cumulative depreciation expense recorded for an asset from the time it was operational, thereby lowering its recorded value in the balance sheet.

Commercial Substance

A concept in accounting that refers to a transaction significantly altering the cash flows of an entity, necessitating its recognition in financial statements.

Double-Declining-Balance Method

A method of accelerated depreciation where an asset's book value is reduced at double the rate of straight-line depreciation.

Useful Life

The estimated duration of time a fixed asset is expected to be economically usable by an entity.