For the Home Country, the Current Account of the Balance

question 104

True/False

For the home country, the current account of the balance of payments improves if the purpose of the foreign investment is to serve the home market from a low-cost production location.

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Definitions:

Autonomous Spending

Spending that does not depend on the current level of national income or output, such as investments, government spending, and exports.

Aggregate Expenditure Line

A graphical representation showing the total planned spending on goods and services at different levels of national income.

Spending Multiplier

A factor by which a change in spending translates into a greater change in income and output throughout the economy.

Price Level

The calculated average price across the broad spectrum of goods and services in an economy.