What Does the Foreign-Trade Effect Suggest Will Happen If There

question 25

Multiple Choice

What does the foreign-trade effect suggest will happen if there is a decrease in the Canadian price level relative to other countries?

• A)It will increase the volume of both Canadian exports and imports.
• B)It will decrease the volume of both Canadian exports and imports.
• C)It will increase the volume of Canadian exports but decrease the volume of imports.
• D)It will decrease the volume of Canadian exports but increase the volume of imports.

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Definitions:

Merchandise Inventories

Goods that a company intends to sell in the ordinary course of business, valued at the lower of cost or market.

Cash Collections

The process of receiving payments from customers for goods or services provided.

Sales Budget

A detailed projection of a company’s sales, in units and dollars, for a specific period, guiding production and marketing efforts.

Master Budget

A comprehensive financial plan for an organization that includes all of its revenue and expense accounts, combining them into a consolidated budget.