In General, If Country a Is Accumulating Capital at a Faster

question 105

Multiple Choice

In general, if country A is accumulating capital at a faster rate than country B, then country A

• A)will soon have a comparative advantage in the production of most goods.
• B)is using a larger proportion of resources to produce consumption goods.
• C)will have a production possibilities frontier that is shifting out faster than country B's.
• D)will have a higher rate of inflation than country B.
• E)will have more unemployment than country B.

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Definitions:

Product Cost

The total amount spent to produce a product, including raw materials, labor, and overhead costs directly tied to the production process.

Period Cost

Period cost refers to any cost that is not directly tied to the production of goods and is expensed in the period it is incurred.

Frosting

A sweet, creamy icing used for coating or decorating cakes and pastries.

Period Costs

Expenses that are not directly associated with manufacturing and are therefore recorded as expenses in the period in which they are incurred.