As Globalization Tends to Increase the Proportion of Imported Inputs

question 27

Multiple Choice

As globalization tends to increase the proportion of imported inputs relative to domestically supplied components

• A) the nominal tariff automatically increases.
• B) the rate of (effective) protection automatically decreases.
• C) the nominal tariff automatically decreases.
• D) the rate of (effective) protection automatically increases.
• E) the amount of tariffs levied increases.

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Definitions:

Financing Activities

Transactions related to changes in the equity and debt of an organization, including issuing shares, paying dividends, and borrowing funds.

Indirect and Direct Methods

Two approaches for preparing cash flow statements: the direct method reports major classes of gross cash receipts and payments, while the indirect method adjusts net income for changes in balance sheet accounts to calculate cash from operating activities.

Direct Method

An approach in cost accounting that allocates service department costs directly to production departments without considering inter-service department flows.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct labor and materials.