If Net Foreign Investment in the United States Is Positive,how

question 96

Multiple Choice

If net foreign investment in the United States is positive,how must national saving and domestic investment be related? (Assume that the capital account is zero and net transfers are zero.)

• A)Domestic investment and national saving must also be positive.
• B)Domestic investment must be less than national saving.
• C)Domestic investment must be greater than national saving.
• D)Domestic investment can be greater than or less than national saving.

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Definitions:

Short-term Receivables

Amounts due to a company that are expected to be received within one year from the date of the balance sheet.

Fair Value

The cost one would incur to sell an asset or to assume a liability during a structured exchange with participants in the market at the time of assessment.

Net Realizable Value

The estimated selling price of goods minus the sum of the cost of completion and the costs necessary to make the sale.

Allowance for Uncollectibles

An accounting provision made for accounts receivable that may not be collected due to customer defaults or other reasons.