When the price level of an economy is ________, ________ is occurring. Conversely, when the price level is ________, ________ is occurring. A) rising, deflation, falling, inflation B) rising, inflation, falling, deflation C) falling, inflation, rising, deflation D) falling, deflation, rising, deflation ANSWER Answer: B
If a country’s freely floating currency is undervalued in terms of purchasing power parity, its capital account is likely to be A) in deficit or tending toward a deficit. B) in surplus or tending toward a surplus. C) subsidized by the International Monetary Fund. D) a candidate for loans from the World Bank. […]
What is the name given to the weighted average of the nominal prices of the goods and services consumed in the economy? A) nominal price B) monetary value C) price level D) consumption bundle ANSWER Answer: C
A 150% return in Belarus is higher than a 15% dollar return in the U.S. A) because arbitrage opportunities exist. B) when the inflation controls are suspended in Belarus. C) it depends on whether these are nominal or real returns. D) regardless of nominal or real returns. ANSWER Answer: C
What is the name of the expression that refers to the costs that a firm incurs in changing its prices? A) fixed costs B) variable costs C) cost-base pricing D) menu costs ANSWER Answer: D
Delaying the payment of accounts payable in order to improve cash management is known as ________. A) ACH transfers B) stretching payables C) credit scoring D) lockbox system ANSWER B
When managing accounts receivable, a good strategy would be to ________. A) send the accounts to a collection agency to extract payments B) tighten the credit terms to force the customer to pay on time C) offer cash discount without losing sales and imposing burden on customer D) make frequent personal visits to the customer […]
________ refers to funds that have been dispatched by a payer but are not in a form that can be spent by the payee. A) Banker’s acceptance B) Float C) A direct send D) Lockbox ANSWER B
What is the name of the ratio of a price level at one point in time to the price level in a designated base year? A) bid-ask spread B) reserve requirement C) percent spread D) price index ANSWER Answer: D
________ float is the delay between the receipt of a check and the actual deposit of it into a firm’s account. A) Disbursement B) Deposit C) Processing D) Clearing ANSWER C
