An Increase in the Current Ratio Due to Increased Inventory

question 45

True/False

An increase in the current ratio due to increased inventory and receivables could be consistent with a recession in the economy.

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Definitions:

Normative

Relating to norms or standards; often refers to the establishment of what is considered right, wrong, acceptable, or obligatory in society.

Instrumental

Pertaining to an approach or action designed as a means to achieve an end or goal, often with emphasis on efficiency and practicality.

Rational

Characterized by clear, logical thinking or decision-making, often based on facts and reasoning rather than emotion or impulse.

Agents

Individuals or entities that act to produce a particular effect or bring about change, often in the context of social, political, or economic processes.