If It Wants to Reduce the Dollars Flowing Out of the Country

question 179

Multiple Choice

If it wants to reduce the dollars flowing out of the country, the United States can limit the number of Japanese cars being imported by imposing a(n)

• A) free trade zone.
• B) GATT.
• C) trade deficit.
• D) balance of trade.
• E) import quota.

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Definitions:

Common Size Analysis

A financial analysis technique that converts each line item of financial statements into a percentage of a base figure for easy comparison.

Base Amount

A reference amount from which adjustments are made, often used in calculations for taxes, benefits, or financial analysis.

Horizontal Analysis

A financial analysis technique that compares line items in the financial statements over a period of time to identify trends and changes.

Liquidity Ratio

A financial metric used to determine how easily a company can pay off its short-term liabilities with its liquid assets.