To Make a Correct Decision About Limiting Imports on Behalf

question 114

Multiple Choice

To make a correct decision about limiting imports on behalf of an infant industry, a government should look at:

• A) political pressure from key constituents.
• B) a cost-benefit analysis measuring the present value of the likely benefits from lower production costs compared with the cost to society of higher prices in the present.
• C) the value of retaining jobs versus the small cost of higher-priced units.
• D) the difficulty of keeping out imports from established trading partners and weighing the number of workers employed in the industry that could not easily get other jobs.

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Definitions:

Cost Of Sales

Direct costs attributable to the production of the goods sold by a company, including materials and labor.

Temporal Method

An accounting technique used to translate the financial statements of a foreign subsidiary to the parent company's currency, using exchange rates that vary with the timing of the original transaction.

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Temporal Method

A method of currency translation that uses exchange rates based on the time assets and liabilities were acquired or incurred.