A Decrease in the Terms of Trade

question 56

Multiple Choice

A decrease in the terms of trade:

• A)reduces real GDP.
• B)decreases consumption.
• C)decreases real national saving if the change in terms of trade is less than fully permanent.
• D)all of the above.

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Definitions:

Accounts Payable

Money owed by a company to its suppliers or creditors for goods and services received.

Accounts Receivable

Outstanding payments from customers for goods or services received from a company but not yet settled.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Liability Account

A type of financial account which represents a company's legal debts or obligations that arise during the course of business operations.