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.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
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.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
A fall in the real interest rate is most likely to increase business investment because it
In the short run, a rise in the overall price level generally causes real output supplied to
Crowding out occurs when expansionary fiscal policy causes
If a country's currency depreciates, other factors remaining constant, its exports usually become
The short-run Phillips curve traditionally shows an inverse relationship between
If commercial banks must keep a reserve ratio of 20 percent and hold no excess reserves, the simple deposit multiplier is