Which of the Following Is the True Description of the Impacts

question 9

Multiple Choice

Which of the following is the true description of the impacts of a temporary positive oil price shock on an oil-importing country like the U.S.?

• A)National saving and current account surplus increase.
• B)National saving decreases but current account surplus increases.
• C)National saving increases but current account surplus decreases.
• D)National saving and current account surplus decrease.

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Definitions:

Current Position Analysis

A company’s ability to pay its current liabilities.

Current Liabilities

Short-term financial obligations due within one year or within the normal operating cycle, such as accounts payable and short-term loans.

Vertical Analysis

An approach to analyzing financial statements where every item within the three primary account categories (assets, liabilities, and equity) on a balance sheet is shown as a percentage of the total category.

Total Liabilities

The combined total of all current and long-term financial obligations owed by an entity at any given time.