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:

APC

In economics, stands for Average Propensity to Consume, which is the ratio of total consumption to total disposable income.

APC

Average Propensity to Consume, which is the fraction of income that households spend on consumption as opposed to saving.

APS

Stands for Average Propensity to Save, which measures the proportion of income that households save rather than spend on goods and services.

Autonomous Consumption

The level of consumption that occurs when income is zero, representing the consuming behavior independent of current income.