Which of the Following Statements Regarding Imports and Exports Is

question 13

Multiple Choice

Which of the following statements regarding imports and exports is true?

• A)Both imports and exports vary directly with the level of domestic income.
• B)Both imports and exports vary inversely with the level of domestic income.
• C)Imports vary directly with the level of domestic income; exports are independent of the level of domestic income.
• D)Exports vary directly with the level of domestic income; imports are independent of the level of domestic income.
• E)Both imports and exports are independent of the level of domestic income.

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Definitions:

Return on Assets

A financial ratio that indicates how profitable a company is relative to its total assets by dividing net income by total assets.

Return on Debt

A measure of how much profit a company generates for every dollar of debt, indicating the efficiency of using borrowed funds.

Total Equity

The net value of a company, determined by subtracting total liabilities from total assets.

Degree of Financial Leverage

This metric quantifies the sensitivity of a company's earnings per share to its fluctuations in operating income, based on the structure of its capital.