The Main Reason That the Producers of Wood Pulp Have

question 43

Multiple Choice

The main reason that the producers of wood pulp have often forward integrated into the production of paper is:

• A)To increase value added by moving closer to the final customer
• B)To exploit technical economies of co-locating pulp and paper making plants while avoiding transaction costs caused by transaction-specific investments
• C)To reduce inventories and improve quality
• D)To insulate the firm from fluctuations in the price of wood pulp.

---

Definitions:

Gold Stock

A quantity of gold held by a central bank or government to support the value of its currency and as a form of investment.

Money Supply

The sum of all financial assets in an economy, including cash, coins, and the amounts in checking and savings accounts at a given point in time.

International Currency

A currency that is widely used for global transactions and accepted between countries, such as the US dollar or Euro.

Paul Krugman

An American economist and columnist known for his work on international economics, trade theory, and economic geography, as well as for being a Nobel laureate.