If a Country Raises Its Budget Deficit,then Its

question 80

Multiple Choice

If a country raises its budget deficit,then its

• A)net capital outflow and net exports rise.
• B)net capital outflow rises and net exports fall.
• C)net capital outflow falls and net exports rise.
• D)net capital outflow and net exports fall.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds.

Direct Method

In cash flow statement preparation, the Direct Method lists all major operating cash receipts and payments, showing the net cash provided by or used in operating activities.

Financial Flexibility

The ability of a company or individual to adjust its spending and capital allocation in response to changing circumstances and opportunities, ensuring financial stability and the potential for growth.

Liquidity

The capacity of an asset to be rapidly transformed into cash without notably influencing its market value.