There Are Several Conditions That Justify Limiting Imports to Ensure

question 127

Multiple Choice

There are several conditions that justify limiting imports to ensure the survival of the "infant industry" and to justify government protection. Which of the following is(are) a justification?

• A) Protection allows a firm an opportunity to move down along its average cost curve over time to become competitive at world prices.
• B) Protection allows a firm to reduce future costs and cause its average cost curve to shift downwards.
• C) There should not be any knowledge spillovers.
• D) Protection allows a firm to shift its total cost curve to the left.

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Definitions:

Direct Method

A cost allocation method that assigns service department costs directly to production departments without considering services provided between service departments.

Accounts Receivable

represents the money owed to a company by its customers for goods or services delivered but not yet paid for.

Prepaid Expenses

Payments made for goods or services before receiving them, recorded as assets in the balance sheet until they are utilized or consumed.

Direct Method

A cash flow forecasting technique that involves estimating cash inflows and outflows from actual sources and uses, as opposed to indirect adjustments.