A Country That Experiences a Large Deficit in the Merchandise

question 44

True/False

A country that experiences a large deficit in the merchandise trade account should always aim at eliminating this trade deficit by adopting strict foreign trade policies.

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Definitions:

Expired Cost

A cost that has been incurred and recognized as an expense, reflecting the consumption of an asset or a service in generating revenue.

Monetary Unit Assumption

An assumption that requires that only those things that can be expressed in money are included in the accounting records.

Asset Prepayments

Payments made in advance for goods or services, recorded as assets on the balance sheet until used or expired.

Time Period Assumption

An accounting principle that allows the business operations to be divided into specific time periods for reporting purposes, such as months or years.