When the Inflow of Foreign Capital Is Greater Than the Outflow

question 212

Multiple Choice

When the inflow of foreign capital is greater than the outflow of domestic capital to other nations,a country runs a:

• A) dirty float.
• B) fixed exchange rate.
• C) capital surplus.
• D) capital deficit.

---

Definitions:

Market Adjustment

Adjustments made to the valuation of assets or liabilities based on current market conditions, affecting the balance sheet and net income.

Trading Securities

Financial instruments bought and held primarily for selling in the near term to generate income on short-term price differences.

Fair Value

An estimate of the price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but does not fully control it.