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Trade Creation Occurs When Lower-Cost External Suppliers Are Replaced by Higher-Cost

question 52

True/False

Trade creation occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area.


Definitions:

Cash Receipts

The collection of money, either in the form of cash or checks, received by a business during its operations.

Receivables Period

The median days a company waits to receive money owed by customers for goods or services delivered on credit.

Payables Period

The payables period is a financial metric that indicates the average time it takes for a company to pay its suppliers and vendors.

Accounts Payable Balance

The total amount of money a company owes to its suppliers or vendors for products and services purchased on credit.

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