The "Escape Clause" of the GATT Agreement Derives Its Name

question 60

Multiple Choice

The "escape clause" of the GATT agreement derives its name from the fact that:

• A) It allows a country to escape from having trade disputes settled by GATT guidelines.
• B) It permits a country to escape from its previously negotiated tariff obligations.
• C) It permits a country to be relieved of having to make its balance of payments obligations for a short period of time.
• D) None of the above.

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Definitions:

Equity Method of Accounting

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investor’s share of the investee’s income, losses, and dividends received.

Capital Account Balances

The amounts recorded in the capital account of a company or individual, reflecting initial investment plus retained earnings minus any withdrawals.

Liquidating

The process of converting assets into cash or cash equivalents by selling them.