If the Terms of Trade Between Any Two Countries Lie

question 123

Multiple Choice

If the terms of trade between any two countries lie somewhere between their respective opportunity costs,then the effects of trade will include

• A)Consumption outside the production possibilities curve for both countries.
• B)Less output for both countries.
• C)Less interdependence between the economies of the two countries.
• D)An expansion of the production possibilities for both countries.

---

Definitions:

Investment

The allocation of resources, such as capital or time, in the expectation of generating an income or profit.

Acid Test Ratio

A liquidity metric that measures a company's capability to cover short-term liabilities with assets easily convertible to cash.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Net Sales

Net sales is the revenue a company generates from its sales of goods or services after deducting returns, allowances for damaged or missing goods, and discounts.