Suppose That Country a and Country B Each Had the Same

question 31

Multiple Choice

Suppose that Country A and Country B each had the same per capita real Gross Domestic Product (GDP) of $10,000 in 2013. Country A's per capital real Gross Domestic Product (GDP) had a growth rate of 3 percent per year and Country B's per capital real Gross Domestic Product (GDP) had a growth rate of 4 percent per year. By 2018, the per-capita real Gross Domestic Product (GDP) for the two countries, respectively, were

• A) $11,941 and $12,653.
• B) $11,593 and $12,167.
• C) $10,300 and $10,400.
• D) $14,000 and $16,000.

Analyze the factors limiting complete specialization in international trade.

Understand the basic concepts and differences between domestic supply and demand curves, import demand curves, and export supply curves.

Analyze the impact of world prices on a country's desire to import or export goods.

Understand the purpose and effects of excise taxes, protective tariffs, revenue tariffs, import quotas, and voluntary export restrictions.

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Definitions:

FOB Destination

A shipping term indicating that the seller bears delivery costs and retains ownership until the goods are delivered to the buyer.

Sales Bonuses

Additional compensation given to employees, usually sales personnel, based on performance and achievement of sales targets.

Ownership

Refers to the legal rights and interests a person or entity has in a property, asset, or business, entitling them to use, manage, and enjoy its benefits.

Owner's Drawings

Withdrawals made by the owner from the business for personal use, considered as a reduction in the equity.