When the Demand for Products Competing with Imports Falls, Demand

question 64

Multiple Choice

When the demand for products competing with imports falls, demand for the specific factors used in their production falls and:

• A) the relative prices (earnings) of these specific factors will fall disproportionally.
• B) the relative prices (earnings) of these specific factors will rise disproportionally.
• C) the relative prices (earnings) of these specific factors will fall by the same rate as for all resources.
• D) the employment of these specific factors will rise disproportionally.

---

Definitions:

Vertical Analysis

A method used in financial statement analysis where each line item is listed as a percentage of a base figure, enabling comparison across different periods or companies.

Horizontal Analysis

An analysis tool used in financial statement analysis to compare historical data, such as revenues and earnings, across different periods.

Percentage Change

A mathematical calculation that depicts the degree of change over time, often used to compare the difference in quantities or values.

Solvency Ratio

A key metric used to measure a company's ability to meet its long-term debt obligations and financial liabilities.