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:

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment to boost its long-term revenue.

Depreciation

The accounting method of allocating the cost of a physical or tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

EBIT

A financial metric that calculates a company's profit by including all costs except for interest and income tax expenses, known as Earnings Before Interest and Taxes.