A Nation Experiences External Balance If It Achieves

question 20

Multiple Choice

A nation experiences external balance if it achieves

• A) no net changes in its international gold stocks.
• B) productivity levels equal to those of its trading partners.
• C) a trade surplus.
• D) neither deficits nor surpluses in its current account.

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Definitions:

Cash Cycle

The period of time it takes for a company to convert its investments in inventory back into cash, reflecting how efficiently a company manages its assets.

Credit Terms

Credit terms are the conditions under which a seller extends credit to a buyer, specifying the repayment period, discount for early payment, and applicable interest charges.

Liberal Credit Terms

Credit conditions that are more favorable to the borrower, such as longer repayment periods or lower interest rates.