Which of the Following Is True About the Occurrence of the Twin

question 223

Multiple Choice

Which of the following is true about the occurrence of the twin deficits?

• A)They always occur together.
• B)They only occur when exchange rates are fixed.
• C)They did not occur after 1990 in the United States.
• D)They occur consistently in all the economies of the world except the United States.

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Definitions:

Capital Lease

A lease agreement that allows a lessee to use an asset in exchange for payment, with terms that transfer substantially all risks and benefits of ownership.

Operating Leases

Leases used for short-term leasing of assets, where the lessee does not assume the risk of ownership, and the asset will be returned to the lessor at the end of the lease term.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets to generate sales revenue, calculated by dividing sales revenue by the average total assets.

Operating Lease

Operating lease is a contract that allows for the use of an asset but does not convey rights of ownership of the asset.