A Canadian Computer Maker Sells Computers to a German Firm

question 89

Multiple Choice

A Canadian computer maker sells computers to a German firm.This company uses all of the revenues from this sale to purchase stock in a German company.What happens to Canadian net exports and net foreign investment due to these transactions?

• A)They will increase both Canadian net exports and Canadian net foreign investment.
• B)They will decrease both Canadian net exports and Canadian net foreign investment.
• C)They will increase Canadian net exports and will decrease Canadian net foreign investment.
• D)They will decrease Canadian net exports and will increase Canadian net foreign investment.

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Definitions:

Drawee

The party in a financial transaction who is directed to pay a certain sum, typically the bank on which a check is drawn.

Negotiable

Capable of being transferred or converted into goods, services, or money under terms agreeable to the involved parties.

Payable To Order

A clause on a financial document that specifies who can receive the payment, allowing the initial payee to endorse it over to another party.

Payable To Bearer

Payable to bearer describes a financial instrument, such as a check or bond, that is payable to the holder or presenter of the document, rather than a specific individual.