When Foreign Assets in the United States Decrease

question 8

Multiple Choice

When foreign assets in the United States decrease,

• A) the United States residents are reducing their debt to the rest of the world.
• B) the United States residents are increasing their stock of assets.
• C) the United States residents are increasing their debt to the rest of the world.
• D) foreign residents debts to the United States residents also increase.

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Definitions:

Monetary Policies

Economic strategies implemented by a country's central bank to control the supply of money and interest rates.

Currency Supply

Currency supply is the total amount of a country's currency that is in circulation or in the commercial banking system, affecting inflation, interest rates, and economic growth.

Price Stability

An economic condition in which prices in the economy do not change drastically over time, minimizing inflation and deflation to promote predictable economic planning.

Purchasing Value

The worth of goods or services that can be bought with a specified amount of currency.