Gabrielle, an Italian Citizen, Uses Some Previously Obtained Dollars to Purchase

question 127

Multiple Choice

Gabrielle, an Italian citizen, uses some previously obtained dollars to purchase a bond issued by a U.S. company. This transaction

• A)decreases U.S.net capital outflow.
• B)does not change U.S.net capital outflow.
• C)increases U.S.net capital outflow by more than the value of the bond.
• D)increases U.S.net capital outflow by the value of the bond.

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Definitions:

Nonrenewable

Resources or energy sources that cannot be replaced or replenished once they are consumed, such as fossil fuels.

Implicit Interest Rate

Implicit interest rate is the interest rate implied in the terms of a lease or loan, calculated based on the initial amount and the future payments or receipts.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments.

Salvage Value

The estimated resale value of an asset at the end of its useful life, considered in depreciation calculations.