If USCitizens Decide to Purchase More Foreign Assets at Each Interest

question 163

Multiple Choice

If U.S.citizens decide to purchase more foreign assets at each interest rate,the U.S.real interest rate

• A)increases,the real exchange rate of the dollar appreciates,and U.S.net capital outflow decreases.
• B)increases,the real exchange rate of the dollar depreciates,and U.S.net capital outflow increases.
• C)decreases,the real exchange rate of the dollar depreciates,and U.S.net capital outflow decreases.
• D)decreases,the real exchange rate of the dollar appreciates,and U.S.net capital outflow increases.

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Definitions:

Yearly Return

The amount of profit or loss realized from an investment over a one year period, usually expressed as a percentage.

Fixed Costs

Costs that do not change with the level of output or activity, over a certain period or range of production.

Variable Costs

Costs that vary directly with the level of production or service activity.

Exiting

The process of leaving or withdrawing from a situation, market, or competition, often used in the context of firms leaving an industry.