A Decrease in United States Net Foreign Direct Investment Would

question 64

Multiple Choice

A decrease in United States net foreign direct investment would occur if

• A)U.S.citizens have decreased the value of foreign stocks and bonds they own.
• B)U.S.citizens have decreased their building or purchasing of facilities in foreign countries.
• C)net foreign investment decreases.
• D)net capital flows increase.

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Definitions:

Lease

A contractual agreement where one party, the lessor, grants the other party, the lessee, the right to use an asset for a specified period in exchange for payment.

Discount Rate

A rate used to determine the present value of future cash flows; in monetary policy, it refers to the interest rate charged to commercial banks for loans from a central bank.

Trust Agreement

A legal document establishing a trust and outlining the rules and guidelines that the trustees must follow in managing the trust assets for the benefit of the beneficiaries.

Present Value

The worth in present terms of a sum of money due in the future or sequences of cash receipts, using a given rate of return for discounting.