Given the Information in the Table Above, If the Home

question 7

Multiple Choice

Given the information in the table above, if the Home economy suffered a meltdown, and the Unit Labor Requirements doubled to 20 for cloth and 40 for widgets then home should

• A) export cloth.
• B) export widgets.
• C) export both and import nothing.
• D) export and import nothing.
• E) export widgets and import cloth.

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Definitions:

Source Documents

Original records or documents that contain the details of a business transaction, used as evidence in accounting.

Financial Leverage

The use of borrowed funds (debt) to amplify returns from investments or projects.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing total liabilities by total assets.

Company's Risk

Refers to the potential for loss or adverse effects on a company's financial health and operational performance, due to internal or external factors.