The Theory That Suggests Specialization by Country Can Increase Worldwide

question 15

Multiple Choice

The theory that suggests specialization by country can increase worldwide production is:

• A) the theory of comparative advantage.
• B) the theory of foreign direct investment.
• C) the international Fisher effect.
• D) the theory of working capital management.

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Definitions:

Payables Period

The average time it takes for a company to pay its invoices from suppliers, indicating the company's payment habits and cash flow management.

Credit Sales

Credit sales are transactions where the customer purchases goods or services on credit, agreeing to pay the supplier at a later date.

COGS

Cost of Goods Sold represents the direct costs associated with the production of the goods sold by a company.

Line of Credit

A flexible loan arrangement with a financial institution that allows a borrower to draw funds up to a specified limit at any time.