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:

Ending Inventory

Ending inventory is the value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Periodic Inventory System

A method used in accounting to update inventory and cost of goods sold periodically at the end of each accounting period rather than after each sale.

Weighted-Average Method

A cost flow assumption used in inventory accounting that calculates the cost of goods sold based on an average cost of inventory items.

Cost of Goods Sold

The total cost directly linked to the production of the products sold by a company, including materials and labor.