The Adjustments Required to Successfully Expand a Model of a Closed

question 42

Multiple Choice

The adjustments required to successfully expand a model of a closed domestic economy into one that accommodates international trade include

• A) the explicit addition of net exports in the accounting identity defining aggregate demand.
• B) the explicit recognition that net exports depend on both GDP and the exchange rate.
• C) the explicit recognition that the exchange rate depends on the domestic real rate of interest.
• D) all of the above.
• E) none of the above.

Differentiate the components included and excluded in corporate annual reports and Management's Discussion and Analysis (MD&A).

Understand vertical and horizontal analysis, and their application in financial statement analysis.

Understand the basic financial ratios and their applications.

Conduct horizontal and vertical financial statement analysis.

---

Definitions:

Publicly Held Corporation

A company whose shares are traded freely on a stock exchange, allowing public investment and ownership.

Tender Offer

A proposal to buy shares of stock from the shareholders of a corporation for a specific price, usually at a premium above market value.

Raider

An individual or company that aims to take over another company, often by buying a substantial amount of its stock.

Directors' Meeting

A formal gathering of the board of directors of a corporation to discuss and make decisions on company policy and management.