Net Real Foreign Investment Is

question 7

Multiple Choice

Net real foreign investment is:

• A)r_t-1•B^f_t-1/P.
• B)Y_t - (C_t +I_t +G_t ).
• C)(B^f_t - B^f_t-1)/P.
• D)((B^f_t - B^f_t-1)/P) - (r_t-1•B^f_t-1/P).

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Definitions:

Opportunity Cost

Incurring a cost by overlooking the next most advantageous option when making choices.

Investment

The allocation of resources, usually money, into something with the expectation of generating income or profit in the future.

Capital

Assets used in the production of goods and services, such as machinery, buildings, or tools.

Production Efficiency

A situation where the economy is utilizing all of its resources efficiently, producing what people want at the lowest possible cost.