A USBalance of Payments Deficit Puts ________ Pressure on the Foreign

question 90

Multiple Choice

A U.S.balance of payments deficit puts ________ pressure on the foreign price of the dollar,which,under a flexible exchange rate system,tends to ________ that deficit.

• A)upward,worsen
• B)upward,eliminate
• C)downward,worsen
• D)downward,eliminate

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Definitions:

Vertical Analysis

A financial analysis method that compares line item amounts on a financial statement to a base figure to determine each item’s relative size or contribution to the whole.

Liquidity Test

A financial analysis conducted to determine a company's ability to pay off its short-term liabilities with its liquid assets.

Acid-Test Ratio

A financial measurement that evaluates a company's ability to pay off its current liabilities with its most liquid assets.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's accounts receivable are collected during a specific period, typically a year.