Ann bought a new shirt from a retailer in the United States. When she checked the tag, she saw that her shirt was made in Vietnam. This means her shirt is a(n) ________ good.

Question

the options are:

1. exported
2. outsourced
3. absolute
4. imported
5. domestic

Answer 1

1. imported

Answer 2

Courtney, great question – thanks for asking. I would like to explain how I approach multiple choice.

First, I eliminate the incorrect answers. Usually, in many four-part multiple choice (A, B, C, D) two answers are obviously incorrect – usually the exact opposite or completely unrelated; and the remaining two answers are nearly similar in their aspect – but one is correct and one is misleading or appears ‘nearly correct’.

Let’s look at your choices (and I will address the correct answer last). I will assume you have read the chapter and are familiar with the definitions of each option. 

The first one is “exported”. This refers to goods leaving our county for over seas markets. Thus, a shirt made in Vietnam is exported good from Vietnam, but not ‘exported’ into our nation.

Second is “outsourced”. This refers to having an external service provider performing services which were once ‘in sourced’ or performed by the company’s own employees. An example is inside of having your own payroll department prepare your company’s payroll, you now have ‘hired’, ‘contracted’, or ‘outsourced’ your payroll to a third-party provider. QuickBooks or Intuit may perform ‘outsourcing’ payroll duties for their clients. As a side note, ‘out sourced’ has nothing to do with this question – it is a misleading, incorrect selection.

Third is “absolute”. This term is more closely used in mathematical or legal terms. It has nothing to do with imports/exports.

Fifth is “domestic”. This term refers to anything found which finds its origin in your own nation. The opposite of domestic is foreign – which relates to anything imported from another country into your own nation. This shirt is a domestic good in its relationship to Vietnam and a foreign good in relation to the USA.

The correct answer is the fourth choice or “imported”. This shirt, domestic to Vietnam and foreign to the USA was exported from Vietnam and brought to the USA as an import to US customers.

As far as multiple choice questions go, always familiarize yourself with your chapter’s or material’s new words or concepts and eliminate the obviously incorrect or ‘slightly’ incorrect answers. The remaining answer should be reduced from the multiple available to the single remaining answer.

Best of luck and if I can assist you in the future, please message me! John F., CPA, 37 years experience & multiple years tutoring experience