The United States Imports Shoes from Third World Countries

question 53

Multiple Choice

The United States imports shoes from third world countries. This means that if the U.S. economy were closed, the domestic price of goods would be ________ the world price of shoes.

• A)less than
• B)greater than
• C)equal to
• D)close to

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Definitions:

EOQ Model

Economic Order Quantity model; an inventory management method used to determine the optimum order quantity that minimizes the total inventory holding costs and ordering costs.

Shortage Costs

Costs that fall with increases in the level of investment in current assets.

Carrying Costs

Expenses incurred for holding inventory, including storage, insurance, and handling costs.

Bond Yields

The amount of return an investor realizes on a bond, calculated by dividing annual interest payments by the bond's current market price.