Imports Have the Potential to Lower a Country's Inflation Rate

question 65

Multiple Choice

Imports have the potential to lower a country's inflation rate because of each of the following EXCEPT:

• A) the import of lower priced goods limits what domestic competitors can charge for goods.
• B) the import of lower priced services limits what domestic competitors can charge for services.
• C) the higher prices of foreign goods spurs domestic competitors to cut prices.
• D) all of the above

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Definitions:

Present Value

The today's equivalent value of a future financial sum or cash flows, discounted at a predetermined rate of return.

CCA Tax Shield

The reduction in taxable income for Canadian businesses, derived from depreciating assets over time under Canada's Capital Cost Allowance regime.

Required Rate of Return

The lowest yearly percentage gain that convinces individuals or corporations to invest in a specific security or initiative.

After-tax Cash Flow

The amount of money a company has after it has paid taxes, representing the net cash inflow or outflow from its operating, investing, and financing activities.