The Purchase of a Capital Asset Adds to the Demand

question 171

True/False

The purchase of a capital asset adds to the demand for loanable funds only if that asset is a domestic one.

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Definitions:

Functional Currency

The currency of the primary economic environment in which an entity operates, usually determined by the currency that influences sales prices for goods and services.

Exchange Differences

Gains or losses resulting from the conversion of foreign currency transactions into the functional currency of a business.

Equity

The value of an owner's interest in a property, calculated by subtracting liabilities from the value of an asset.

Functional Currency

The currency of the primary economic environment in which an entity operates and carries out its transactions.