Starting from a Trade Surplus, What Would Create a Trade

question 72

Multiple Choice

Starting from a trade surplus, what would create a trade deficit?

• A) a decline in saving and investment
• B) a rise in saving and investment
• C) a decline in saving and a rise in investment
• D) a rise in saving and a decline in investment

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Definitions:

Payback Period

The time required for an investment to generate cash flows sufficient to recoup the initial investment cost.

Rate of Return

A measure of the profit or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.

Minimum Required Rate

The lowest return rate necessary for an investment to be considered acceptable.

Net Present Value

Net Present Value (NPV) is a calculation used to determine the current value of a series of future cash flows, taking into account a specified rate of return.