If the United States Sells Computers to Russia,and Uses the Proceeds

question 16

Multiple Choice

If the United States sells computers to Russia,and uses the proceeds to buy shares of stock in Russian companies,the U.S.trade balance ________ and the U.S.capital and financial account balance ________.

• A)rises; rises
• B)rises; falls
• C)falls; falls
• D)falls; rises

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Definitions:

Post-Acquisition Equity

The equity interest in a subsidiary acquired by a parent company after the initial purchase date, affecting the parent's total equity interest in the subsidiary.

Pre-Acquisition Equity

The equity interest in a company before any acquisitions, typically involving the original shares and retained earnings before new investments.

Loss of Control

A situation where a company or shareholder no longer has the power to direct the financial and operating policies of another entity to gain benefits from its activities.

Dispersion

A statistical term describing the extent to which values in a data set are spread out around the mean.