With Reference to Cultural and Ethical Issues, the World Trade

question 39

Multiple Choice

With reference to cultural and ethical issues, the World Trade Organization has

• A) succeeded in providing equal protection of intellectual property among nations
• B) made progress in providing equal protection of intellectual property among nations
• C) phased out all trade and tariff barriers between the United States and Mexico
• D) eliminated slave labor and child labor
• E) played little role in addressing cultural and ethical issues among nations

Differentiate between the roles of principals and agents in various contexts.

Identify activities exclusive to government and how they impact economic efficiency and resource allocation.

Assess how government enforcement (or lack thereof) of contracts and laws influences economic activity.

Analyze the role of government in market economies, including its power to coerce and how it affects economic efficiency and private-sector risk.

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Definitions:

Cost of Capital

The rate of return that a company needs to earn on its investment projects to maintain its market value and satisfy its investors and creditors.

Internal Rate of Return

The discount rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.

Multiple IRRs

The situation where a project has more than one internal rate of return, occurring due to unconventional cash flows.

Reinvestment Assumption

The theory that cash flows will be reinvested at a constant rate, often used in financial modeling.