Which Is the Most Accurate Statement About Trade

question 144

Multiple Choice

Which is the most accurate statement about trade?

• A)Trade can make every nation better off.
• B)Trade makes some nations better off and others worse off.
• C)Trading for a good can make a nation better off only if the nation cannot produce that good itself.
• D)Trade helps rich nations and hurts poor nations.

---

Definitions:

Average Variable Cost

The total variable costs (costs that vary with production volume) divided by the quantity of output produced, representing the variable cost per unit.

Net Present Value (NPV)

The difference between the present value of cash inflows and the present value of cash outflows over a period of time. It's used to evaluate the profitability of an investment or project.

Capital Investment Funds

Financial resources that are used by a company to purchase physical assets like property, industrial buildings, or equipment.

Capital Rationing

The situation that exists if a firm has positive Net Present Value projects but cannot find the necessary financing.