In Analyzing International Trade,we Often Focus on a Country Whose

question 77

Multiple Choice

In analyzing international trade,we often focus on a country whose economy is small relative to the rest of the world.We do so

• A)because it is impossible to analyze the gains and losses from international trade without making this assumption.
• B)because then we can assume that world prices of goods are unaffected by that country's participation in international trade.
• C)in order to rule out the possibility of tariffs or quotas.
• D)All of the above are correct.

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, includes voting rights, and entitles the holder to dividends.

Recession

A temporary phase of economic downturn characterized by decreased trade and industrial activity, typically recognized by a decline in the Gross Domestic Product (GDP) for two consecutive quarters.

Expected Rate of Return

The anticipated percentage increase in value that an investment is predicted to generate over a specific time.

Expected Return

The average of all possible returns for an investment, weighted by the likelihood of each outcome.