The Theory of Resource Endowment

question 25

Multiple Choice

The theory of resource endowment:

• A) explains why France exports cosmetics, wine, commercial aircraft, and clothing.
• B) states that a nation will trade goods that can be produced with the production factor that is most abundant.
• C) explains why an automobile can be made either by hand or by a capital-intensive process.
• D) explains why transportation costs may be ignored when calculating the costs of imports.
• E) none of the above.

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Definitions:

Changes in Equity

Adjustments in a company's equity section of the balance sheet, including changes due to profits, losses, dividends, and issuance or repurchase of shares.

Operating Activities

The day-to-day activities of a company involved in producing and selling its products or services, which are reflected in its net income.

Cash Flow Reporting

A financial statement segment that provides information on the cash inflows and outflows of an entity during a specific period.