When Economists Talk About the Gains from Trade They Mean

question 54

Multiple Choice

When economists talk about the gains from trade they mean that

• A)no one ever gets hurt by trade.
• B)the benefits of trade outweigh the losses.
• C)business firms benefit from trade but not necessarily individuals.
• D)trade increases government revenue through taxes on imports.
• E)economic restructuring is usually quick and painless.

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal loan amount.

Long-Term Bank Loan

A debt financing obligation issued by a bank or financial institution to a company, with a repayment period exceeding one year.

Operating Activities

Business activities directly related to the production, sale, and delivery of a company's products or services, often reflected in the cash flow statement.

Prepaid Expenses

Costs paid for in advance of receiving the benefit of the service or product, recorded as an asset on the balance sheet until the expense is incurred.