The Capital Account Measures

question 65

Multiple Choice

The capital account measures

• A)the sum of U.S.sales of assets to foreigners and U.S.purchases of foreign assets.
• B)the difference between U.S.sales of assets to foreigners and U.S.purchases of foreign assets.
• C)the difference between U.S.sales of manufactured goods to foreigners and U.S.purchases of foreign products.
• D)none of the options

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Definitions:

Acquired Comparative Advantage

An advantage gained by a country or firm through learning, innovation, and investment, as opposed to natural endowments.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported.

Free-Trade Policies

Government policies aimed at reducing or eliminating barriers to trade between countries, such as tariffs and quotas, to encourage international commerce.

GATT

The General Agreement on Tariffs and Trade, a legal agreement between many countries, aimed at promoting international trade by reducing or eliminating trade barriers such as tariffs or quotas.