When Considering the Effects of Transportation Costs,the Conclusions of Our

question 47

Multiple Choice

When considering the effects of transportation costs,the conclusions of our trade model must be modified.This is because transportation costs result in:

• A) Lower trade volume,higher import prices,smaller gains from trade
• B) Lower trade volume,lower import prices,smaller gains from trade
• C) Higher trade volume,higher import prices,smaller gains from trade
• D) Higher trade volume,lower import prices,greater gains from trade

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Definitions:

Internal Rate

Often refers to the internal rate of return (IRR), a metric used to estimate the profitability of potential investments.

Net Present Value

A financial metric that calculates the present value of all cash flows associated with a project, considering both inflows and outflows, to assess profitability.

Initial Investment

The amount of money used to start a project, investment, or venture for the first time.

Average Annual

refers to the yearly average of any given set of data, often used in financial contexts to denote the average return, cost, or other financial metrics over a year.