Which of the Following Is True

question 12

Multiple Choice

Which of the following is true?

• A) When economies of scale are important in an industry, the domestic market of a small country may not be large enough to support cost-efficient firms.
• B) In small countries, firms in industries where economies of scale are important will tend to export little, if any, of their output.
• C) The size of the trade sector (exports plus imports) as a share of GDP will generally be larger in more populous countries than in smaller less-populated countries.
• D) Countries with higher trade barriers have higher growth rates.

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Definitions:

Capital Gains

The increase in value of an asset or investment above its purchase price, realized upon the sale of the asset.

Treasury Stock

Treasury stock refers to shares that were once in circulation but have been bought back by the issuing company and held in its own treasury.

Contra

A term used in accounting to describe accounts that have an opposite effect on the account they are related to, used to reduce the balance of the original account.

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing the value that belongs to the company's owners.