Suppose a Country Attempts to Be Self-Sufficient and Doesn't Trade

question 175

Multiple Choice

Suppose a country attempts to be self-sufficient and doesn't trade with any other countries. From an economic perspective, citizens of this nation can be expected to

• A) gain materially from this policy because they can consume more goods over time than if they engaged in trade with foreigners.
• B) produce less total value than they could if they specialized and engaged in trade with other nations.
• C) gain from more rapid growth since home markets are reserved for home producers.
• D) be just as well off without trade since the value of what is sent to other nations in trade just equals the value of what is received in trade.

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Definitions:

Standards

Predetermined benchmarks or norms used for measuring performance, costs, and efficiency in production.

Variable Overhead Efficiency Variance

This measures the difference between the actual variable overhead costs incurred and the standard costs expected for the actual production level achieved, pertaining to efficiency in managing variable overheads.

Machine-Hours

The total operational hours recorded for all machines within a production process, serving as a basis for calculating machine-related costs and efficiencies.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries for management.