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:

Operating Cycle

The operating cycle is the duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales, reflecting how quickly a company can convert its products into cash.

Readily Marketable

Assets that are considered readily marketable are those that can easily be converted into cash because there is a high demand and an active market for them.

Short-Term Investments

Financial assets that are expected to be converted into cash or sold within a year.

Seasonal Fluctuations

Variations in business activity, sales, or performance that occur regularly at certain times of the year due to the season.