Which of the Following Statements Is True About the National

question 93

Multiple Choice

Which of the following statements is true about the National Activity Index?

• A) When the index has a zero value, the economy has reached a trough.
• B) Negative values always mean the economy is in a recession.
• C) Positive values indicate the economy may face a period of increasing inflation.
• D) Negative values mean the economy is growing more slowly than its long-term trend.

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Definitions:

Net Sales

The total revenue from sales of products or services less returns, allowances, and discounts.

Cost of Goods Sold

The direct expenses related to producing goods sold by a company, including material costs and direct labor, essential for calculating a company's gross profit.

Current Ratio

It's a measure used to determine a business's capacity to fulfill obligations due in less than one year, through a calculation of current assets over current liabilities.

Acid-Test Ratio

A financial metric that measures the ability of a company to pay off its short-term liabilities with its quick assets.