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If Chileans buy more U.S.stocks and bonds and U.S.residents buy more Chilean wine,then


A) both U.S.net exports and U.S.net capital outflows rise.
B) U.S.net exports rise and U.S.net capital outflows fall.
C) U.S.net exports fall and U.S.net capital outflows rise.
D) both U.S.net exports and U.S.net capital outflows fall.

E) A) and B)
F) C) and D)

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A country has $3 billion of domestic investment and net exports of $2 billion.What is its saving?


A) $1 billion
B) $2billion
C) $3 billion
D) $5 billion

E) All of the above
F) A) and C)

Correct Answer

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Sam,a U.S.citizen,buys bonds issued by a Greek company that bottles olives.Sam's purchase is


A) foreign direct investment.By itself it increases U.S.net capital outflow.
B) foreign direct investment.By itself it decreases U.S.net capital outflow.
C) foreign portfolio investment.By itself it increases U.S.net capital outflow.
D) foreign portfolio investment.By itself it decreases U.S.net capital outflow.

E) All of the above
F) None of the above

Correct Answer

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A country has $50 million of domestic investment and net capital outflow of $15 million.What is saving?


A) $65 million
B) -$65 million
C) $35 million
D) -$35 million

E) None of the above
F) A) and B)

Correct Answer

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Which of the following is an example of U.S.foreign portfolio investment?


A) A U.S.legal office opens a branch office in Holland.
B) Erica,a U.S.resident,buys bonds issued by the Swiss government.
C) Both A and B are examples of U.S.portfolio investment.
D) Neither A nor B are examples of U.S.portfolio investment.

E) All of the above
F) None of the above

Correct Answer

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If U.S.exports are $300 billion and U.S.imports total $350 billion,which of the following is correct?


A) The U.S.has a trade surplus of $350 billion.
B) The U.S.has a trade surplus of $50 billion.
C) The U.S.has a trade deficit of $350 billion.
D) The U.S.has a trade deficit of $50 billion.

E) A) and C)
F) A) and D)

Correct Answer

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A U.S.firm buys sardines from Morocco and pays for them with U.S.dollars.Other things the same,U.S.net exports


A) increase,and U.S.net capital outflow increases.
B) increase,and U.S.net capital outflow decreases.
C) decrease,and U.S.net capital outflow increases.
D) decrease,and U.S.net capital outflow decreases.

E) All of the above
F) B) and C)

Correct Answer

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