When,in Our Analysis of the Gains and Losses from International

question 161

Multiple Choice

When,in our analysis of the gains and losses from international trade,we assume that a particular country is small,we are

• A)assuming the domestic price before trade will continue to prevail once that country is opened up to trade with other countries.
• B)assuming there is no demand for that country's domestically-produced goods by other countries.
• C)assuming international trade can benefit producers,but not consumers,in that country.
• D)making an assumption that is not necessary to analyze the gains and losses from international trade.

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Definitions:

Retention Ratio

The percentage of net earnings not paid out as dividends but kept by the company for reinvestment.

Cash Dividends

Distributions from a company's earnings paid to its shareholders.

Sales Capacity Level

Sales capacity level refers to the maximum amount of sales a company can achieve based on its current resources and constraints.