Of the Three Main Principles of GATT, the Most Favored

question 16

Multiple Choice

 Of the three main principles of GATT, the most favored nation principle meant that

• A) a tariff rate granted to one member of GATT would be extended to all members.
• B) foreign firms would be subject to the same rules and regulations as a country's domestic firms.
• C) trade disputes would be settled by the unanimous agreement of all parties to the dispute.
• D) countries should specialize in producing goods for which they have the lowest opportunity cost of production.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of the investee, but not control or joint control of those policies.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.

Straight-Line Method

A method of depreciation that allocates an asset's cost evenly throughout its useful life.

Carrying Amount

The value at which an asset or liability is recognized on the balance sheet, calculated as its original cost minus depreciation or amortization.