Suppose a U

question 52

Multiple Choice

Suppose a U.S.automaker builds and operates a new factory in Italy.Future production from such an investment will

• A)increase Italian GDP more than it increases Italian GNP.
• B)increase Italian GNP more than it increases Italian GDP.
• C)have no affect on Italian GNP,but will increase Italian GDP.
• D)have no affect on either Italian GDP or GNP.

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Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash flow information from operating activities is used instead of adjustments to net income.

Revenues

income that a business receives from its normal business activities, usually from the sale of goods and services to customers.

Operating Activities

Transactions and events that affect the net income of a business, related to its principal revenue-producing activities.

Financing Activity

Activities that result in changes in size and composition of the contributed equity and borrowings of the entity, reflected in the cash flow statement.