A Firm Has a Current Ratio of 1; in Order

question 190

Multiple Choice

A firm has a current ratio of 1; in order to improve its liquidity ratios, this firm might

• A) improve its collection practices, thereby increasing cash and increasing its current and quick ratios.
• B) improve its collection practices and pay accounts payable, thereby decreasing current liabilities and increasing the current and quick ratios.
• C) decrease current liabilities by utilizing more long-term debt, thereby increasing the current and quick ratios.
• D) increase inventory, thereby increasing current assets and the current and quick ratios.

Understand the factors driving Chinese firms' expansion into the United States.

Identify and explain the concept of open markets and their implications.

Recognize the specific elements that comprise the external environment of businesses.

Analyze the impacts of trade agreements (like NAFTA) and operations (like maquiladoras) on member countries and border regions.

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Definitions:

Common Resource

A natural or man-made resource where one person’s use diminishes other people’s access or enjoyment, but it is difficult to exclude anyone from using it.

Pollution Market Failure

Pollution market failure occurs when the environmental costs of pollution are not reflected in the market prices of goods or services, leading to overconsumption and excessive pollution.

Free Rider Problem

The issue arising when individuals benefit from resources, goods, or services without paying for them, which can lead to under-provision of those goods or services.

Public Goods

Non-excludable and non-rivalrous products or services that are accessible to all members of a society, such as public parks or national defense.