Question

Which of the following statement is correct? Select one:

a. All the answers are incorrect.

b. Calvin Klein, Liz Claiborne, The Gap, and other garment industry companies that manufacture clothing outside of the United States to control labor costs should not worry about the moral issues of human rights against their obligations to stockholders.

c. According to the law of comparative advantage, countries can export goods and services they produce well and import those goods and services that others develop better.

d. A multinational corporation (MNC) is a corporation that has operations in only one country.

e. If a company holds stocks or bonds denominated in the U.S. dollars in other countries, the fluctuations in the value of the U.S. dollar will affect the dollar value of the stocks and bonds.

Answer 1

Answer "c" is correct.

Comparative advantage in producing one product result in lower cost so it is advised that country should produce goods with comparative advantage and import those where other countries has comparative advantage.

Option b is incorrect as these companies should adhere to moral rights wherever they are producing goods.

Option d is incorrect as MNC has operations in more than one country.

Option e is incorrect as foreign exchange fluctuation wont have any impact.