When an American Buys a Swedish Financial Asset

question 29

Multiple Choice

When an American buys a Swedish financial asset,

• A)both c and d
• B)the U.S.balance of goods and services worsens
• C)the U.S.capital account balance declines
• D)the U.S.balance of payments worsens
• E)the U.S.trade balance worsens

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Definitions:

Ethanol Imported

Refers to ethanol (a biofuel) that is bought from foreign producers and brought into a country’s borders, often used as an additive in gasoline.

Consumer Surplus

The contrast between the total expenditure consumers are willing to make on a good or service and the total expenditure they actually make.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing profit.

Import Restrictions

Measures by governments to control the quantity or quality of goods and services coming into a country to protect domestic industries from foreign competition.