Question Details

Companies that reduce their margins on export products 


1.	European Union labor costs exceed U.S. and British labor costs primarily because
a.	worker productivity is lower in the EU
b.	union wages are higher in the EU
c.	layoffs and plant closings are more restrictive in the U.S. and Britain
d.	the amount of paid time off is higher in the EU
e.	labor-management relations are better in the EU


	

	2.	Companies that reduce their margins on export products in the face of appreciation of their home currency may be motivated by a desire to
a.	sacrifice market share abroad but build market share at home
b.	increase production volume to realize learning curve advantages
c.	sell foreign plants and equipment to lower their debt
d.	reduce the costs of transportation
e.	all of the above


	

	3.	In a recession, the trade balance often improves because
a.	service exports exceed manufactured good exports
b.	banks sell depressed assets
c.	fewer households can afford luxury imports
d.	direct investment abroad declines
e.	the capital account exceeds the current account



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