Every Type of Economic Union Shares the Development and Enlargement

question 55

Multiple Choice

Every type of economic union shares the development and enlargement of market opportunities as a basic orientation. Which of the following best describes the primary way market opportunities are enlarged by economic unions?

• A) Preferential tariff treatment for participating members.
• B) A common economic defense force with costs shared by all members.
• C) Formulation of cartels.
• D) Seeking economic dominance through boycotts of rivals.
• E) Movement towards a common language as a means to overcoming economic hurdles.

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Definitions:

Cost of Capital

Signifies the expected rate of return that market participants demand in order to commit money to an investment, considering risk and potential gains.

IRR

Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of investments, indicating the annualized rate of return that sets the net present value of all cash flows (both positive and negative) from a particular project equal to zero.

NPV

Net Present Value; a method used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.

Payback Period

The length of time it takes for an investment to generate enough cash flow to recover its initial cost.