How Might a U

question 102

Multiple Choice

How might a U.S.federal budget surplus affect the balance of trade? (Assume exchange rates are stated in terms of foreign currency per U.S.dollar.)

• A)A federal budget surplus raises interest rates,which raises exchange rates,and increases the balance of trade.
• B)A federal budget surplus raises interest rates,which raises exchange rates,and reduces the balance of trade.
• C)A federal budget surplus reduces interest rates,which raises exchange rates,and reduces the balance of trade.
• D)A federal budget surplus reduces interest rates,which reduces exchange rates and increases the balance of trade.

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Definitions:

Revenue Recognition Rules

guidelines that determine when and how revenue is recognized and recorded in the financial statements.

Sales Discounts

Reductions in the amount owed by a customer, usually offered as an incentive for early payment.

Single-Step Income Statement

A simplified income statement that calculates net income by subtracting total expenses from total revenues with a single calculation.

Total Expenses

The sum of all costs and expenses incurred by a business during a specific period of time.