Scenario: Two Neighboring Countries, Sweetland and Sourland, Are Identical in Terms

question 146

Multiple Choice

Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000) , education of workforce, and value of natural resources owned.
-Refer to the scenario above.Despite all inputs being equal in Sweetland and Sourland,Sweetland has many more companies competing against one another.What can we say about its GDP relative to Sourland's GDP?

• A) Its GDP likely is smaller, because fewer resources are employed.
• B) Its GDP likely is greater, because resources are allocated more efficiently.
• C) Its GDP likely is greater, because fewer resources are employed.
• D) Its GDP likely is smaller, because companies compete more fiercely for profits.

Understand the principles of equity method accounting.

Calculate return on total assets and understand its significance.

Understand the consolidation process for financial statements.

Recognize and account for unrealized gains and losses.

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Definitions:

Transforming Resources

Inputs used in the production process that include both raw materials (physical resources) and the effort provided by people (human resources).