Question

2. Which of the following statements is (are) correct?
(x) The increase in international trade in the United States during the past 50 years is partly due to improvements in transportation, advances in telecommunications, and an increase in the trade of goods that have a high value per pound.
(y) Over the last 50 years U.S. exports and imports have increased and U.S. imports as a percentage of GDP have more than doubled but U.S. exports as a percentage of GDP have more than tripled.
(z) International agreements such as the North American Free Trade Agreement (NAFTA) have reduced such barriers to trade as tariffs and import quotas and encouraged trade of goods and services between countries.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

3. Which of the following statements about net capital outflow is (are) correct?
(x) Net capital outflow measures the imbalance between the amount of foreign assets bought by domestic residents and the amount of domestic assets bought by foreigners.
(y) Net capital outflow refers to the purchase of domestic assets by foreign residents minus the purchase of foreign assets by domestic residents.
(z) If a country has more business opportunities that are relatively attractive to other countries, we would expect that country to have positive net capital outflow.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only

Answer 1

2) :-A is right option

International trade is defined as the exchange of goods and services between countries

3) :- A is right option

If a country has more business opportunities that are relatively attractive to other countries, we would expect that country to have positive net capital outflow

Net capital outflow measures

the imbalance between the amount of foreign assets brought by domestic residents and the amount of domestic assets bought by foreigners

Net capital outflow equals

(the purchase of foreign assets by domestic residents) - (the purchase of domestic assets by foreign residents)