Other Things Equal, When Europeans Want to Buy More Grain

question 96

Multiple Choice

Other things equal, when Europeans want to buy more grain from the United States:

• A)U.S.imports will increase.
• B)European exports will increase at every level of domestic income.
• C)U.S.exports will increase at every level of domestic income.
• D)the U.S.balance of payments will show a deficit.
• E)U.S.consumption spending will fall.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold before expenses are subtracted.

Intra-entity Sales

Transactions of goods or services that occur between divisions or subsidiaries within the same parent company, impacting consolidated financial statements.

Equity Income

The earnings derived from an investment in the shares of another company, where the income is recognized in proportion to the ownership percentage.

Equity Method

An accounting technique used by a company to record its investment in another company, based on the entity's net asset value and subsequent earnings and losses.