A Bank Which Has Assets of $85 Billion and a Net

question 150

Multiple Choice

A bank which has assets of $85 billion and a net worth of $10 billion must have:

• A)liabilities of $75 billion.
• B)excess reserves of $10 billion.
• C)liabilities of $10 billion.
• D)excess reserves of $75 billion.

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Definitions:

Net Capital Outflow

The difference between a country's savings and its domestic investments, representing the amount of money that flows out of the country to invest abroad minus the amount of money that flows into the country from foreign investors.

Net Exports

The value of a country's total exports minus its total imports; a measure of a nation's foreign trade balance.

Net Capital Outflow

The financial discrepancy between home country residents' investments in foreign lands and foreign investors' stakes in domestic assets.

U.S. Net Capital Outflow

The difference between the purchase of foreign assets by residents of the United States and the purchase of U.S. assets by foreigners.