A Good's Relative Price Indicates Its

question 32

Multiple Choice

A good's relative price indicates its:

• A) value only in its own nation.
• B) value compared with the same good sold in another nation, expressed in a common currency.
• C) exchange value only.
• D) net value after taxes and depreciation.

---

Definitions:

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets, calculated as current assets divided by current liabilities.

Cash Equivalents

Short-term, highly liquid investments that are easily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets.