The Foreign Purchases Effect

question 119

Multiple Choice

The foreign purchases effect

• A) shifts the aggregate demand curve rightward.
• B) shifts the aggregate demand curve leftward.
• C) shifts the aggregate supply curve rightward.
• D) moves the economy along a fixed aggregate demand curve.

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Definitions:

Financing Activities

Transactions related to raising capital and repaying investors, affecting the company's equity and long-term debt.

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures, essential for maintaining or expanding assets.

Operating Activities

Transactions and events that relate to the principal revenue-generating activities of the company.

Financing Activity

Transactions that result in changes to the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.