When a US Firm Sells a Good Abroad For, Say, 100 Euros

question 39

Multiple Choice

When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1euro) , U.S. net exports increase by $150. These $150 in exports can be accounted for as $150 increase in capital outflow because ________.

• A) private consumption in the foreign country increases by $150
• B) If the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm
• C) If the U.S. firm uses the proceeds to buy a U.S. bond, capital investment in the foreign country has increased.
• D) all of the above
• E) none of the above

---

Definitions:

Sensation Seeker

An individual who is characterized by the pursuit of experiences and feelings that are varied, novel, complex, and intense.

Need For Achievement

A psychological trait that drives individuals to pursue and attain challenging goals, often with a significant emphasis on excellence and overcoming obstacles.

Homeostasis

The dynamic process through which biological systems maintain stability and optimal internal conditions despite external changes.

Drives

Basic, innate urges that motivate behavior, such as hunger or thirst.