Ahmed Is Working and Is Spending More Than He Is

question 42

Multiple Choice

Ahmed is working and is spending more than he is earning by using his savings to make up the difference. Which of the following statements is true?

• A) Ahmed is in equilibrium since he pays all of his bills.
• B) Ahmed is in disequilibrium.
• C) By using savings Ahmed is using special drawing rights.
• D) By using savings Ahmed has caused the balance of payments to go into a deficit situation.

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Definitions:

Average Assets

The average value of a company's assets over a specific period of time, used in calculating metrics such as return on average assets (ROAA).

ROI

Return on Investment, a measure used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments.

Controllable Margin

The portion of income that can be directly controlled or influenced by management decisions, often excluding fixed costs.

Operating Assets

Assets used in the day-to-day operations of a business, contributing to its ability to generate income.