Foreign investment in the United States and U.S. investment abroad is recorded in the
A) capital and financial account.
B) investment account.
C) current account.
D) creditor/debtor account.
E) official settlements account.
A
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Appendix: Common value auctions with open bidding necessarily entail
a. asymmetric information b. ascending prices c. more than two bidders d. amendment of bids e. sealed final offers.
The name of the rate that equalizes the prices of internationally traded goods between countries is called the
a. international interest rate. b. arbitrage rate. c. purchasing power parity rate. d. foreign exchange rate.
Other things the same, if the Japanese real interest rate were to increase, Japanese net capital outflow
a. and net capital outflow of other countries would rise. b. and net capital outflow of other countries would fall. c. would rise, while net capital outflow of other countries would fall. d. would fall, while net capital outflow of other countries would rise.
A currency that is pegged to another currency is usually changed on a supply-and-demand basis.
a. true b. false