The Demand for U

question 28

Multiple Choice

The demand for U.S.dollars by foreign nations increases as:

• A)more Americans travel abroad.
• B)foreigners increase their purchase of American goods.
• C)Americans increase their purchase of foreign goods.
• D)Americans increase their investments in foreign stocks or bonds.
• E)Americans send more gifts abroad.

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Definitions:

Gross Investment

The total amount spent on purchasing or constructing new capital assets before accounting for depreciation.

Net Investment

The portion of total investments in physical assets (like buildings, machinery, and inventory) that remain after accounting for depreciation.

Depreciation

The process of allocating the cost of a tangible or intangible asset over its useful life, reflecting the decrease in value of the asset over time due to use, wear and tear, or obsolescence.

Stock Of Capital Goods

The total quantity of physical assets such as machinery, buildings, and equipment that are used to produce goods and services.