Question

As the owner of kingdom's treasures, jerry negotiates with suppliers who hope to place their products in his high-volume retail gift store. jerry finances his inventory through the credit offered by suppliers who delay payments for up to 60 days after the merchandise has been delivered to his business.

a. residual
b. trade
c. asynchronous
d. lifo

Answer 1

The subject of this question is Business. A trade surplus occurs when exports exceed imports, whereas a trade deficit emerges when imports surpass exports. In this context, the example demonstrates how trade imbalances can occur even in small-scale, informal trade relations, affecting the economic situation of the parties involved.

Step-by-step explanation:

The subject of this question is Business. The credit terms are usually negotiated based on the buyer's creditworthiness and history with the supplier.

When discussing economic terms, it is important to understand that inventories refer to the goods produced by a business that are yet to be sold. When business is booming, these inventory levels tend to drop as products move faster off the shelves. Conversely, if sales are slow, inventory levels increase. Trade credit facilitates the management of these inventory levels for the business owner by allowing them to acquire stock without immediate cash payments.

The concept of trade deficits and surpluses described in the Robinson and Friday example aligns with the idea of trade imbalances. A trade surplus occurs when exports exceed imports, whereas a trade deficit emerges when imports surpass exports. In this context, the example demonstrates how trade imbalances can occur even in small-scale, informal trade relations, affecting the economic situation of the parties involved.