Canada Is Both an Importer and an Exporter of Automobiles

question 52

Multiple Choice

Canada is both an importer and an exporter of automobiles.If Canada exports more automobiles than it imports,and the price of automobiles rises,then ceteris paribus,Canada's terms of trade will likely

• A)improve because the index of export prices would rise and the index of import prices would fall.
• B)remain the same because the index of export prices would rise by the same amount as the index of import prices.
• C)deteriorate because of the loss of exports that would result.
• D)deteriorate because the loss of exports would be more than offset by the gain in imports.
• E)improve because the index of export prices will rise more than the index of import prices.

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Definitions:

Dividend Policy

A company's strategy or guidelines dictating how often dividends will be paid to shareholders, the form of the dividend, and how much will be distributed.

Contingencies

Potential events or conditions that may occur in the future and could impact the financial performance or operations of a business.

Business Plan

A formal written document detailing the goals of a business, the strategy for achieving them, and the timeframe for success.

Planning Horizon

The time a business plan covers. Typically between a few months and five years.