If Net Exports Is a Negative Number, the Government Sector

question 378

Multiple Choice

If net exports is a negative number, the government sector must ________ if the private sector is in a ________.

• A) run a surplus; surplus
• B) equal zero; deficit
• C) run a deficit; surplus
• D) The statement errs because the accounts are not related.

---

Definitions:

Business Valuation

The process of determining the economic value of a business or company unit, based on analysis of the company's financial performance and market position.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

NPVGO

Net Present Value of Growth Opportunities, a measure assessing the value of future investment opportunities of a company.

Growth Opportunities

Prospects or chances a company has to expand its operations, increase sales, and achieve higher profits.