A domestic company buying and constructing a factory in another country is recorded primarily as
Correct answer: A. A financial account outflow in the balance of payments
- A. A financial account outflow in the balance of payments
- B. A current account export of consumer services
- C. A government transfer in the capital account
- D. A domestic consumption item in national income
Explanation
The purchase of a foreign productive asset is an outward financial investment and is recorded in the financial account. It is not a domestic consumption item, and it is different from an export of goods or services.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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