The General Agreement on Tariffs and Trade Is an International

question 183

Multiple Choice

The General Agreement on Tariffs and Trade is an international agreement

• A) to establish the North American continent as a free trade area.
• B) to encourage peaceful settlements of trade disputes, but has no particular point of view about the desirability of higher or lower tariffs.
• C) to encourage world trade by lowering tariffs and other trade barriers.
• D) to make all tariffs illegal.

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Definitions:

Explicit Costs

Money paid out to different parties during the operation of a business, covering expenses like employee salaries, leasing costs, and material purchases.

Opportunity Costs

The value of the next best alternative forgone as a result of making a particular choice.

Production

The process of creating goods or services by combining various elements such as labor, technology, and raw materials.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources that it already owns without paying for them explicitly.