For a Small Nation, a Production Subsidy Increases Exports By

question 16

Multiple Choice

For a small nation, a production subsidy increases exports by:

• A) the same amount as an export subsidy.
• B) less than with an export subsidy.
• C) more than with an export subsidy.
• D) undercutting world price.

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Definitions:

Cash Cycle

The period between the purchase of inventory and the collection of accounts receivable from the sale of that inventory.

Inventory Period

The typical duration required for a firm to convert its stock into revenue.

Accounts Receivable Turnover

A financial metric that measures how often a company collects its average accounts receivable balance in a period.

Accounts Payable Turnover

A financial ratio that measures the rate at which a company pays off its suppliers by dividing total purchases by average accounts payable for the period.