In the Balance of Payments Accounts, a Net Importer of Capital

question 8

Multiple Choice

In the balance of payments accounts, a net importer of capital is a nation that

• A) sells more goods in foreign countries than it imports.
• B) must be running a trade surplus.
• C) sells more assets to individuals in other countries than the assets it buys from them.
• D) buys more assets from individuals in other countries than the assets it sells to them.

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Definitions:

Variable Production Cost

Variable production costs are expenses that change in proportion to the volume of goods or services produced, such as raw materials and labor costs.

Fixed Production Cost

Costs that do not vary with the level of production or sales volume, such as rent, salaries, and equipment depreciation.

Variable Selling Expense

Costs related to selling products that vary with the level of sales activity, such as commissions.

Net Operating Income

A company's income after operational expenses have been deducted but before taxes and interest are considered.