If a Foreigner Purchases a U.S.government Security the

question 7

Multiple Choice

If a foreigner purchases a U.S.government security the

• A)supply of dollars rises
• B)federal government deficit declines
• C)demand for dollars rises
• D)U.S.money supply rises

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Definitions:

Purchasing-Power Parity

A theory in economics that suggests that in the absence of transportation and other transaction costs, identical goods will have the same price in different markets when prices are expressed in a common currency.

Appreciate

In economic terms, it refers to the increase in value of an asset over time.

National Saving

The total amount of savings generated within a country, consisting of both private and public savings.

Domestic Investment

The total amount of money that is invested within a country's borders by its residents and businesses.