If Goods Are Produced Abroad but Consumed Domestically

question 48

Multiple Choice

If goods are produced abroad but consumed domestically,

• A)those goods are termed imports
• B)international trade has not occurred
• C)the domestic economy is economically inefficient
• D)there are no gains from specialization
• E)those goods are termed exports

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping, indicating that as price decreases, demand increases.

Complement

A good or service that is used together with another good or service, which increases the demand for each other.

Financing

The process of providing or obtaining the funds necessary for investment, purchase, or undertaking a project.

Normal Good

A good whose demand varies directly with income; nearly all goods are normal goods.