Which Component of Strategy Measures the Reduction in Costs Attributable

question 72

Multiple Choice

Which component of strategy measures the reduction in costs attributable to a reduction in the quantity of inputs used in Year 2 relative to the quantity of inputs that would have been used in Year 1 to produce the Year 2 output?

• A) the growth component
• B) the price-recovery component
• C) the productivity component
• D) the cost leadership component

Understand the principle of comparative advantage and its role in shaping international trade patterns.

Evaluate the impact of tariffs on government revenue.

Recognize the role of tariffs and quotas in protecting domestic industries.

Analyze the effects of trade restrictions on global and domestic prices and quantities.

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Definitions:

Spot Rate

The current market price at which a particular asset, such as foreign currency, can be bought or sold for immediate delivery.

Direct Quote

A currency exchange rate expressed in terms of the home currency per unit of the abroad currency.

Euros

The official currency used by the countries of the Eurozone.

Portfolio Investment

In international finance, investment in the securities of a foreign company or government.