If Net Foreign Investment Is Positive, Which of the Following

question 263

Multiple Choice

If net foreign investment is positive, which of the following must be true? (Assume that the capital account is zero and net transfers are zero.)

• A)Capital outflows are less than capital inflows.
• B)Domestic investment must be less than national saving.
• C)Net exports are negative.
• D)The country will owe more to foreigners in the future.
• E)None of the above is true when net foreign investment is positive.

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Definitions:

Discharges

Refers to the legal process by which a debtor is released from liability for certain debts, effectively wiping them out.

Promises of Performance

Commitments made by one party to carry out specific actions or tasks, usually within the context of a contract.

Conditioned

A term describing something that has been altered or affected by a specific condition or set of conditions.

Condition

A possible future event, the occurrence or non-occurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract.