The Average Price of Exports Divided by the Average Price

question 170

Multiple Choice

The average price of exports divided by the average price of imports is called the

• A) terms of trade.
• B) average cost ratio.
• C) export-import ratio.
• D) trade balance.

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Definitions:

Interest Tax Shield

The decrease in income tax liabilities due to permitted interest expense deductions.

Levered Firm

A corporation that has debt in its capital structure, indicating it uses borrowing (leverage) to finance its operations or expansions.

M&M Proposition I

A principle of financial theory stating that under perfect market conditions, the value of a firm is unaffected by how it is financed.

Liquidation

The process of converting assets into cash or cash equivalents by selling them in the market.