At the Beginning of the Year, One Developing Country (DVC)has

question 117

Multiple Choice

At the beginning of the year, one developing country (DVC) has a real income per capita of $800. In a developed country (IAC) , the real income per capita is $30,000. Both countries experience a 4 percent growth rate for the year. At the end of the year, the absolute income gap between these two countries will have increased from $29,200 to

• A)$30,368.
• B)$31,200.
• C)$30,120.
• D)$32,032.

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Definitions:

Short-Term Assets

Assets that are expected to be converted into cash or used up within one year or within the business's operating cycle if longer than a year.

Quick Ratio

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

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Current Ratio

Current assets divided by current liabilities.