Question

Question 1
A country's net capital outflows is equal to

Question 1 options:

Savings

Imports minus exports

Investment

Exports minus imports

Question 2
Net capital inflows are

Question 2 options:

The act of shipping physical capital to another country

A good reason to restrict trade

Foreign purchases of domestic goods

Foreign purchases of any domestic assets

Question 3
If you travel to South Africa and purchasing power parity holds, you would expect goods and services to be

Question 3 options:

less expensive than they were in the US.

more expensive than they were in the US.

just as expensive as they were in the US.

Answer 1

Question 1) A country’s net capital outflow is equal to Exports - Imports. So option C is the correct answer.

Question 2) The act of shipping physical capital to another country is known as the foreign purchase of domestic goods. So option C is the correct answer.

Question 3) If we travel to South Africa and purchasing power parity holds, we would expect goods and services to be less expensive than they were in the U.S. This is because the currency of South Africa is weaker than the currency of U.S..So option A is the correct answer.

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