What Is a Liquid Asset and Why Is It Necessary

question 28

Essay

What is a liquid asset and why is it necessary for a firm to maintain a reasonable level of liquid assets?

Analyze the effects of tariffs, quotas, and other trade barriers on global trade and domestic markets.

Identify the economic rationale behind the imposition and impact of tariffs and quotas.

Evaluate the role of opportunity costs in trade decisions and production.

Distinguish between absolute and comparative advantages using practical examples.

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Definitions:

Angel Investor

An individual who provides capital to start-up companies in exchange for ownership equity or convertible debt.

Divestiture

The process of a company selling off or liquidating a portion of its business or assets, often for strategic, legal, or financial reasons.

Time Warner

A major multinational media and entertainment conglomerate, known for producing film, television, and entertainment content.

Angel Capitalism

Investment in start-up companies by wealthy individuals, known as angel investors, who provide capital in exchange for equity or convertible debt.