Suppose There Are Two Countries That Are Identical in Every

question 60

Multiple Choice

Suppose there are two countries that are identical in every way with the following exception: Country A has a lower depreciation rate (δ) than country B.Given this information,we know with certainty that

• A)the growth rate will be the same in the two countries.
• B)the growth rate will be higher in A than in B.
• C)K / N will be higher in B.
• D)Y / N will be higher in B.

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Definitions:

Accounts Payable Period

The Accounts Payable Period is the average amount of time it takes for a business to pay off its suppliers after receiving goods or services.

Operating Cycle

The average period of time required for a business to convert its investments in inventory back into cash through the process of producing goods, selling them, and collecting revenue from customers.

Cash Cycle

The period between the outlay of cash for the purchase of inventory and the collection of cash from customers in a business operation, reflecting the liquidity and efficiency of the company.

Cash Cycle

The duration between the outlay of cash to produce goods or services and the collection of cash from sales.