When There Is Political Instability in Another Country, the United

question 256

Multiple Choice

When there is political instability in another country, the United States can expect

• A) an increase in the financial account balance due to an increase in the current account.
• B) an increase in the financial account balance due to the movement of assets to the U.S.
• C) a decrease in the balance of payments due to a decrease in official reserve transactions.
• D) a decrease in the balance of payments due to a decrease in the demand for goods and services.

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and the costs required to make the sale, used in inventory valuation and accounts receivable.

Merchandise Value

The total worth of goods held for resale by a retail or wholesale business, typically assessed at cost or market price.

Inventory Valuation

The method used to assign value to a company's inventory, including raw materials, work-in-progress, and finished goods, affecting cost of goods sold and net income.

Year-End Inventory

The total value of all inventory that a company has in stock at the end of its fiscal year.