If Foreigners Spend More on U

question 73

Multiple Choice

If foreigners spend more on U.S.-made goods and services than we spend on theirs

• A) foreigners must borrow from the United States or sell U.S. assets to make up the difference.
• B) all U.S. national saving remains in the United States.
• C) we must borrow from foreigners because of low imports.
• D) funds flow in from abroad to help finance U.S. investment.

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Definitions:

Long-Run Average Total Cost Curve

A graphical representation showing the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output.

Minimum

The lowest allowable or possible amount, level, or point.

Marginal Cost

The amount needed to generate one more unit of a good or service.

Average Total Cost

The overall expense of manufacturing, when dispersed across the number of products made, encompassing both constant and fluctuating expenses.