If Foreigners Become Less Confident in the Ability of the U.S

question 5

Multiple Choice

If foreigners become less confident in the ability of the U.S. dollar to hold its value, the _____ multiplier will _____.

• A) potential; rise
• B) potential; fall
• C) actual; rise
• D) actual; fall

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Definitions:

Quick Ratio

A liquidity indicator that measures a company's ability to meet short-term obligations with its most liquid assets.

Fixed Charge Coverage

A financial ratio that measures a firm's ability to cover its fixed charges, such as interest and leases, with its earnings before interest and taxes (EBIT).

Quick Asset Ratio

A liquidity measure that indicates a company's capacity to pay its short-term liabilities with its quick assets, excluding inventories.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets over its current liabilities.