If the Risk of Buying U

question 144

Multiple Choice

If the risk of buying U.S.assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds,then

• A)net capital outflow and the real exchange rate will rise.
• B)net capital outflow will rise and the real exchange rate will fall.
• C)net capital outflow will fall and the real exchange rate will rise.
• D)net capital outflow and the exchange rate will fall.

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Definitions:

Sales Revenue

The total amount of money generated from selling goods or services before any expenses are subtracted.

Raw Material

Basic material that is used in the manufacturing process to produce goods, often processed and transformed into finished products.

Cash Outflows

Money that exits a business or an individual's account, typically for payments or purchases.

Cash Inflows

The total amount of money being transferred into a business, typically from operational, investing, and financing activities.