Which of These Cases Is an Example of Worsening Terms

question 41

Multiple Choice

Which of these cases is an example of worsening terms of trade for a less developed country?

• A)El Salvador signs a free-trade agreement with the United States that allows the United States to keep some tariffs on Salvadoran goods.
• B)A group of foreign investors removes its money from Kenya because the government does not grant the group special concessions.
• C)The price of Chilean copper decreases while the price of Japanese cars increases.
• D)The amount of oil Nigeria can export decreases while the number of imported cars increases.

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Definitions:

Subjective Judgment

The use of personal opinions and feelings rather than external evidence or objective criteria to make decisions or evaluations.

Discounted Cash Flow

An appraisal technique that calculates an investment's worth by discounting its expected future cash flows to account for the time value of money.

Large Projects

Significant capital investments undertaken by a company to expand operations, enter new markets, or develop new products.

Net Operating Working Capital

Net Operating Working Capital is the difference between a company's operating current assets and its operating current liabilities, indicating short-term financial health.