Labor Cost Advantages Gained by Moving into a Country with Low

question 40

Multiple Choice

Labor cost advantages gained by moving into a country with low wages may be short-lived because ________.

• A)transport costs go up to cancel out the cost savings
• B)tax increases cancel out all labor cost differentials
• C)rivals adopt capital-intensive production methods
• D)competitors follow leaders into low-wage areas

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Definitions:

Accounting Cycle

The collective process of recording and processing the accounting events of a company, starting from the transaction occurrence to the preparation of financial statements.

Reporting Period

The specific timeframe for which financial statements are prepared, showing the financial position and performance of a company.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Post-closing Trial Balance

A list of all balances in a company’s ledger accounts after the closing entries are made, serving as a check to ensure debits and credits are balanced at the end of an accounting period.