A Transfer Payment That Rises Automatically During a Recession Is

question 98

Multiple Choice

A transfer payment that rises automatically during a recession is

• A) interest payments on the national debt.
• B) unemployment compensation.
• C) Social Security payments to retired persons.
• D) government payments to war veterans.

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Definitions:

Net Operating Working Capital

A financial metric that highlights a firm's operational liquidity by subtracting current liabilities (excluding short-term debt) from current assets.

Current Ratio

A financial metric quantifying a firm's capability to fulfill its short-term liabilities with its present assets.

Aging Schedule

Breaks down accounts receivable according to how long they have been outstanding. This gives the firm a more complete picture of the structure of accounts receivable than that provided by days’ sales outstanding.

DSO

The average duration a company needs to collect payment post-sale is known as Days Sales Outstanding.