Because of Vertically Specialized Production Processes, the Volume of Intermediate

question 147

Multiple Choice

Because of vertically specialized production processes, the volume of intermediate goods trade has risen. In 2010, it was approximately ____ of total world trade.

• A) 15%
• B) 25%
• C) 40%
• D) 60%

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Definitions:

Jointly Controlled Enterprises

A business arrangement between two or more parties who share control over the business operations and decision-making process.

Proportionate Consolidation

An accounting method where an investor entity combines its share of each of the assets, liabilities, income, and expenses of a jointly controlled entity with similar items, line by line, in its financial statements.

Cost Method

An accounting method used to value investments, where the investment is recorded at its acquisition cost without adjusting for market changes.

Commercial Substance

A situation where the risk, timing, and amount of an entity's future cash flows are expected to change as a result of an economic transaction.