If US Prices Increase Relative to the Rest of the World

question 118

Multiple Choice

If U.S. prices increase relative to the rest of the world, we would expect imports:

• A) to increase and exports to fall.
• B) to decrease and exports to increase.
• C) as well as exports to increase.
• D) as well as exports to decrease.

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Definitions:

Receivables

Money owed to a company by its customers or other parties for goods or services provided on credit, recorded as an asset on the balance sheet.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.

Days Sales In Inventory

A financial metric indicating the average time it takes for a company to turn its inventory into sales, reflecting inventory management efficiency.

Days To Pay Payables

An accounting metric that calculates the average number of days it takes a company to pay its invoices from suppliers, indicating how effectively a company is managing its outgoing cash flow.