Net Capital Outflow Measures the Imbalance Between the Amount of

question 173

Multiple Choice

Net capital outflow measures the imbalance between the amount of

• A)foreign assets held by domestic residents and domestic assets held by foreign residents.
• B)foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners.
• C)foreign assets bought by domestic residents and the amount of domestic goods and services sold to foreigners.
• D)None of the above is correct.

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Definitions:

Diminishing Returns Effect

A principle in economics where increasing one factor of production, while keeping others constant, will at some point yield lower per-unit returns.

Variable Cost

Expenses that vary directly with the level of production output, such as raw materials, labor, and energy costs.

Output

The total amount of goods or services produced by a company, sector, or economy within a specific time period.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.