If C+I+G>Y, Then Net Exports and Net Capital Outflow Are

question 129

True/False

If C+I+G>Y, then net exports and net capital outflow are both greater than zero.

---

Definitions:

Acid-Test Ratio

A stringent test that indicates whether a company has enough short-term assets to cover its immediate liabilities without selling inventory.

Current Liabilities

Current liabilities are a company's debts or obligations that are due within one year.

Liquidity

Refers to how quickly an asset can be converted to cash. Liquid assets can be converted to cash quickly, whereas illiquid assets cannot.

Operating Cycle

The period of time it takes for a business to purchase inventory, sell products, and receive cash from sales.