In an Economy Open to International Trade Where the Interest

question 29

Multiple Choice

In an economy open to international trade where the interest rate at which saving and investment would be equal is ________ the world real interest rate ________.

• A)above;a trade deficit ensues
• B)below;there is a net capital outflow
• C)above;there is a net capital inflow
• D)all of the above
• E)none of the above

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Definitions:

Bad Debt Expense

An expense recorded to account for receivables that are expected not to be collected.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services that have been delivered or used but not yet paid for.

Net Sales

The total revenue a company generates from sales after subtracting returns, allowances, and discounts.

Increase in Accounts Receivable

A situation where the amount of money owed by customers to a company grows due to sales on credit outpacing payments received.