The International-Trade Effect States That, Ceteris Paribus, an Increase in the Price

question 78

Multiple Choice

The international-trade effect states that, ceteris paribus, an increase in the price level will:

• A)increase net exports.
• B)decrease net exports.
• C)increase exports.
• D)decrease imports.

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Definitions:

Cost Method

An accounting technique used to value inventory, usually at the lower of cost or market price, and investments in certain conditions.

Par Value Method

An accounting method used for issuing shares that assigns a nominal value (par value) to the shares, which may affect the accounting treatment of share issues.

Retiring Treasury Stock

The act of permanently removing previously bought-back shares (treasury stocks) from the market, reducing the company's available shares and total equity.