When Does Free Trade Occur

question 1

Multiple Choice

When does free trade occur?

• A) It occurs when there are no transportation costs.
• B) It occurs when a government pays for the imports.
• C) It occurs when there are barriers to entry.
• D) It occurs when there are no barriers to trade.

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Definitions:

Statement of Cash Flows

A financial report that shows how changes in the balance sheet and income affect cash and cash equivalents, and breaks down financing, investing, and operating activities.

Stock Split

An increase in the number of shares of a company's stock without changing the shareholders' equity, typically done to lower the trading price of the stock.

Dividends

A portion of a company's earnings distributed to its shareholders.

Operating Expenses

Costs associated with running a business that are not directly tied to producing goods or services, such as salaries and rent.