If Net Exports Are Positive, Then

question 130

Multiple Choice

If net exports are positive, then

• A) net capital outflow is positive (indicating an inflow of capital), so foreign assets bought by Americans are greater than American assets bought by foreigners.
• B) net capital outflow is positive (indicating an inflow of capital), so American assets bought by foreigners are greater than foreign assets bought by Americans.
• C) net capital outflow is negative (indicating an outflow of capital), so foreign assets bought by Americans are greater than American assets bought by foreigners.
• D) net capital outflow is negative (indicating an outflow of capital), so American assets bought by foreigners are greater than foreign assets bought by Americans.

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Definitions:

Goodwill

An intangible asset that arises when a company acquires another company for more than the fair value of its net identifiable assets.

Accounts Receivable

Represents money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Inventories

Assets held for sale in the ordinary course of business, or goods that will be used or consumed in the production of goods to be sold.

Gross Profit

The difference between revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.