Implementing a Regional Free­trade Agreement May Have an

question 13

Multiple Choice

Implementing a regional free­trade agreement may have an
Effect in which, due to reduced tariffs, a nation in the agreement
Begins to import a product it had previously produced itself.This
Effect is called:

• A)trade creation.
• B)trade diversion.
• C)reciprocal trade agreements.
• D)the employment effect of FTAs.

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Definitions:

Total Assets

The sum of all owned resources (assets) that have economic value which a company or individual possesses.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its customers by comparing net credit sales to average accounts receivable.

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for sales made on credit.