The United States' Balance of Payments Is Likely to Improve

question 116

Multiple Choice

The United States' balance of payments is likely to improve when

• A) there is an increase in political instability in other countries.
• B) the inflation rate in the United States rises relative to other countries.
• C) the American government increases its spending on foreign aid.
• D) American people want to invest more in foreign countries.

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Definitions:

Reportable

Refers to information or actions that must be disclosed to regulatory authorities or in financial statements according to legal or regulatory requirements.

Combined Revenues

The total revenue generated by a group of companies or divisions consolidated into a single figure.

Commercial Substance

A situation where the risk, timing, or amount of the entity's future cash flows changes as a result of a financial transaction.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, where the investment is recorded at original cost and subsequently adjusted to reflect the investor's share of the net assets of the investee.