Which of the Following Is True with Regard to a Free

question 82

Multiple Choice

Which of the following is true with regard to a free trade area?

• A)Factors of production are allowed to move freely between member nations.
• B)Each member country is allowed to determine its own trade policies with regard to nonmembers.
• C)Member nations are required to have a common currency.
• D)Member nations are required to have a common monetary and fiscal policy.
• E)Member nations are required to have a central political apparatus that coordinates economic, social, and foreign policy.

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Definitions:

Contracting Efficiencies

Improvements in performance or cost savings achieved through outsourcing or entering into contracts for services.

Agency Costs

Expenses stemming from conflicts of interest between principals (owners) and agents (managers) in a corporation.

Decision Management

The process of making business decisions through repeatable and manageable methodologies, often aided by specialized software.

Standard Costs

Predetermined costs for materials, labor, and overheads used as benchmarks to evaluate actual production or manufacturing costs.