Some Countries Export Products at Prices Below the Cost of Production

question 64

Multiple Choice

Some countries export products at prices below the cost of production or the price charged in the domestic market.This practice is called:

• A)cream skimming.
• B)import substitution.
• C)monopoly pricing.
• D)dumping.
• E)arbitrage.

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Definitions:

Payback Period

The amount of time it takes for an investment to generate an amount of income or cash flows to recover the initial capital outlay.

Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business, measuring financial health.

Initial Cost

The acquisition cost of an asset or investment, covering all expenses involved in making the asset operational, including purchase price, installation, and setup.

Payback Period

The time required for an investment to generate income or profits equal to the original cost of investment.