If Net Exports Is a Negative Number for a Particular

question 76

Multiple Choice

If net exports is a negative number for a particular year, then

• A)the value of firms' inventories declined over the course of the year.
• B)consumption exceeded the sum of investment and government purchases during the year.
• C)the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year.
• D)the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is increased. For assets and expenses, it is the debit side; for liabilities, equity, and revenues, it is the credit side.

Financial Statement

A financial statement is a formal record of the financial activities and position of a business, person, or other entity, detailing earnings, expenditures, assets, liabilities, and equity at a specific point in time.

Permanent/Temporary

Classification of accounts where permanent accounts represent balance sheet items carried over multiple periods, and temporary accounts are income statement items closed at the end of each period.

Normal Balance

The side of an account (debit or credit) on which increases to the account are recorded, determined by the account type.