If Net Exports Are Negative, Then

question 3

Multiple Choice

If net exports are negative, 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:

Distribution Inventory

Stocks of goods and materials held at various points in a supply chain, intended for downstream distribution.

Physical Inventory

The process of counting and verifying all physical goods and materials in stock by a business.

Shipping Costs

The expenses involved in transporting goods from one location to another, including freight charges, packaging, and handling fees.

Diseconomies of Scale

An economic concept where an increase in production leads to a rise in average costs per unit due to inefficiencies.