When U.S. Residents Purchase Foreign Assets

question 179

Multiple Choice

When U.S. residents purchase foreign assets,

• A) there is an outflow of funds from abroad and this is recorded as a negative item in the current account.
• B) there is an outflow of funds from the U.S. and this is recorded as a negative item in the capital account.
• C) there is an outflow of funds from abroad and this is recorded as a positive item in the current account.
• D) there is an outflow of funds from abroad and this is recorded as a positive item in the capital account.

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Definitions:

Commander-in-Chief

The title given to the person who holds supreme command over the armed forces of a nation; in the United States, this position is held by the President.

Armed Forces

The military forces of a country, including the army, navy, air force, and sometimes others, responsible for defense and security.

IMF

The International Monetary Fund, an organization of 190 countries, working to foster global monetary cooperation, secure financial stability, and reduce poverty around the world.

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.