Martin, a Canadian Citizen, Uses Some Previously Obtained Lithuanian Currency

question 138

Multiple Choice

Martin, a Canadian citizen, uses some previously obtained Lithuanian currency (litas) to purchase a bond issued by a Lithuanian company. How does this transaction affect Canadian net capital outflow?

• A) It increases Canadian net capital outflow by more than the value of the bond.
• B) It increases Canadian net capital outflow by the value of the bond.
• C) It does not change Canadian net capital outflow.
• D) It decreases Canadian net capital outflow.

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Definitions:

Capacitance Unit

The unit of measurement for capacitance, the farad (F), indicating the ability of a system to store an electric charge.

Farad

The unit of capacitance in the International System of Units (SI), symbolized as F, indicating the capacity of a capacitor to store charge per unit voltage.

Leakage Current

The amount of current that flows through the dielectric separating the plates of a capacitor.

Dielectric Material

A non-conductive substance that is used to store electric charge, typically between the plates of a capacitor.