A Utilities Company in the Netherlands Buys Wind Generators Made

question 194

Multiple Choice

A utilities company in the Netherlands buys wind generators made by a U.S.company.It pays from them with previously obtained dollars.By itself,this exchange

• A)increases both U.S.net exports and U.S.net capital outflow.
• B)decreases both U.S.net exports and U.S.net capital outflow.
• C)increases U.S.net exports and does not affect U.S.net capital outflow.
• D)None of the above is correct.

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Definitions:

Debits

Entries that are made on the left side of an account, representing an increase in assets or expense accounts or a decrease in liability, equity, or revenue accounts.

Credits

Accounting entries that increase liabilities or decrease assets, representing the opposite of debits in the double-entry bookkeeping system.

Highly Leveraged

Describes a company or investment that has a high level of debt relative to equity, indicating a potentially higher risk and return profile.

Debt

An amount of money borrowed by one party from another, under the condition that it is to be paid back at a later date, usually with interest.