Despite the Long-Term Mutual Gains from International Trade,in the Short

question 43

Multiple Choice

Despite the long-term mutual gains from international trade,in the short run

• A)particular firms,industries,and groups of workers can be harmed substantially by imports.
• B)international trade is usually inflationary.
• C)countries must learn to be self-sufficient.
• D)most countries realize mutual net losses.

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Definitions:

Precautionary Motive

The need to hold cash as a safety margin to act as a financial reserve.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Planned Expenditures

Forecasted spending for specific purposes within a certain time frame, often categorized into operating or capital expenditures.

Cash Surpluses

Occurs when a company has more cash inflow than outflow, leading to excess liquidity.