When Foreigners Purchase U

question 154

Multiple Choice

When foreigners purchase U.S. assets, there is an inflow of funds from abroad and this is recorded as a

• A) positive item in the capital account.
• B) positive item in the current account.
• C) negative item in the capital account.
• D) negative item in the current account.

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Definitions:

Organization Issuing

Refers to entities, such as companies or governmental bodies, that release or provide specific items, documents, or securities.

Solvent

Referring to an entity's ability to meet its financial liabilities through available assets.

Real Rate Of Return

The annual percentage of profit earned on an investment, adjusted for changes in the inflation rate.

Shareholders

Individuals or entities that own shares in a corporation, making them partial owners and entitling them to a portion of the company's profits.