The Relative Price of a Unit of Cloth in the Small

question 9

Multiple Choice

The relative price of a unit of cloth in the small isolated country of Moribundia is 5 units of food. When the central city, Mudhole, puts in an airstrip, the country is able to engage in trade. If the relative price of cloth in the outside world is 3 units of food, then Moribundia will export ________ and ________ factors used in the production of ________ will benefit.

• A) cloth; mobile; cloth
• B) food; mobile; food
• C) food; immobile; cloth
• D) food; immobile; food
• E) cloth; immobile; cloth

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Definitions:

Protectionism

Economic policy of restricting imports from other countries through methods such as tariffs and import quotas, aimed at protecting domestic industries.

Consolidated Statements

Financial statements that aggregate the financial position and operations of a parent company and its subsidiaries, showing the financial results of the entire group as a single entity.

Future Date

A specified date that is set in the future, relevant in contexts such as finance for contracts or planning events.

Translation Loss

A decrease in the value of a company's assets or income due to changes in exchange rates when consolidating financial statements of subsidiaries in foreign currencies.