If Net Exports Are Equal to Net Foreign Investment

question 103

Multiple Choice

If net exports are equal to net foreign investment,

• A)the balance of payments is zero.
• B)the current account balance is equal to the negative of the financial account balance.
• C)net capital inflows are equal to imports minus exports.
• D)all of the above are true.

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Definitions:

Duty of Loyalty

The legal obligation of fiduciaries to act in the best interests of their beneficiaries or the entity they serve.

Right of First Refusal

A contractual right that gives its holder the option to enter a business transaction with the owner of something, before the owner is entitled to enter into that transaction with a third party.

Watered Stock

Shares that are issued by a company at a value much greater than its actual assets, typically leading to an inflated market value.

Business Judgment Rule

A principle of corporate governance that shields a corporation's board of directors from liability for decisions made in good faith, with due care, and in the best interests of the corporation.