Consider Only the Flow of Funds Spent on Acquiring Assets

question 156

Multiple Choice

Consider only the flow of funds spent on acquiring assets. Which of the following is true if the U.S. has a net capital outflow of funds?
I. Foreign purchases of U.S. assets are greater than U.S. residents' purchases of foreign assets.
II. Foreign purchases of U.S. assets are less than U.S. residents' purchases of foreign assets.
III. There is a capital account surplus.
IV. There is a capital account deficit.

• A) I and III
• B) I and IV
• C) II and III
• D) II and IV

Understand the inherent stability of the private sector as perceived by monetarists.

Learn about the velocity of money and its calculation in various economic contexts.

Acknowledge the impact of behavioral economics on traditional economic theory.

Understand the fundamentals of the Quantity Theory of Money.

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