Question

Germany experiences an increase in foreign direct investment (capital outflow) when a German hotel chain opens a new hotel in France.

Select one:

True

False

Net capital outflow refers to the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreign residents, and, as a result, the U.S. experiences an increase in foreign portfolio investment (capital outflow) when a U.S. resident buys stock in companies located in Japan.

Select one:

True

False

The increase in international trade in the United States is partly due to increased trade of goods with a high value per pound.

Select one:

True

False

A country has $200 million of net exports and $750 million of saving. Therefore, net capital outflow is $200 million and domestic investment is $950 million

Select one:

True

False

Suppose that a pound of copper costs $3 in the United States and costs 40 pesos in Mexico. If 10 Mexican pesos trade for one U.S dollar. then the real exchange rate is 3/4 pounds of Mexican copper per pound of U.S. copper.

Select one:

True

False

Answer 1

1) Yes when a foreign company invests in other there will be increase in fdi

2) Yes when a US resident buys share of a japanese share there shall be n increase in outflow

3) Yes, Increase in trade can increase with increase in prices

4) No Net capital outflow just does not depend on net exports and savings

5) Yes . This is because the cost of US copper is $3 and Mexico Copper is $4