Which of the Following Is True

question 255

Multiple Choice

Which of the following is true?
i.Comparative advantage drives international trade.
ii.Compared to a no-trade situation,in a market with imports,producer surplus is larger.
iii.Tariffs lower the domestic price of imported goods.

• A) Only i
• B) Only ii
• C) Only iii
• D) i and ii
• E) i and iii

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Definitions:

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are worth more than their cost to achieve specific financial goals.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, where the asset's cost is evenly spread over its useful life.

Yearly Depreciation

The accounting process of allocating the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear, and tear over time.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument back to their present value, thus helping to determine the potential value of an investment.