Which of the Following Best Explains What Happens When a Business

question 56

Multiple Choice

Which of the following best explains what happens when a business firm purchases a drill press manufactured in Germany?

• A)There will be an increase in exports.
• B)There will be an increase in import spending.
• C)There will be an increase in investment expenditures.
• D)There will be an increase in both investment expenditures and import spending.
• E)There will be a decline in investment expenditures and an increase in import spending.

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Definitions:

Profit Expectations

Anticipations or forecasts about the profits a business aims to achieve in a future period.

Loanable Funds

The loanable funds market is a concept in economics where the supply of and demand for loans determine the interest rate, including all forms of credit like loans, bonds, or savings deposits.

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use or emergencies.

Investment Funds

Pools of capital from multiple investors used to collectively purchase securities while each investor retains ownership and control of their own shares.