An Unfavorable Balance of Trade Occurs When

question 54

Multiple Choice

An unfavorable balance of trade occurs when:

• A) exports equal imports.
• B) the balance of payments balances.
• C) the current and capital account in the BOP are equal.
• D) the value of the exports of goods exceeds the value of the imports of goods.
• E) the value of the exports of goods is less than the value of the imports of goods .

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Definitions:

Competitive Markets

Markets characterized by a large number of buyers and sellers where no single entity has enough power to influence the price of goods or services significantly.

Four-firm Concentration Ratio

A measure indicating the total market share controlled by the four largest firms in an industry, used to determine the competitiveness of the market.

Localized Markets

Markets that are confined to a specific geographical area, where the products or services cater primarily to the local population.

Import Competition

Import competition involves domestic companies facing competition from foreign-produced goods and services in the domestic market.