If Free Trade Occurs, Producers in the Net Exporting Country

question 90

Multiple Choice

If free trade occurs, producers in the net exporting country will be _____ off, and producers in the net importing country will be _____ off than before trade.

• A) better; worse
• B) worse; better
• C) better; better
• D) worse; worse

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Definitions:

Shipping Costs

Expenses associated with the transportation of goods from one location to another, often borne by the seller or buyer as per the sales contract.

Single-Step Income Statement

A simplified financial statement that calculates net income by subtracting expenses from revenues in one step.

Net Income

The final amount a company keeps as profit after paying off all expenses and taxes from its revenues.

FOB Shipping Point

A term in shipping agreements where the buyer is responsible for the goods and their transportation cost as soon as they leave the seller's premises.