The United States is a net importer of capital. This means
a. that U.S. citizens own more foreign assets than foreigners own U.S. assets
b. that citizens of other countries are buying more U.S. assets than U.S. citizens are buying foreign assets
c. only that U.S. citizens own foreign assets
d. only that foreign citizens own U.S. assets
e. either that U.S. citizens own foreign assets or that foreign citizens own U.S. assets
QUESTION 2If a change in technology improves the marginal productivity of capital, the
a. supply of capital will increase
b. supply of capital will decrease
c. demand for loanable funds will increase
d. demand for loanable funds will decrease
e. supply of loanable funds will increase
QUESTION 3If foreigners increase their ownership of U.S. assets, this would help to offset
a. a deficit in the U.S. current account
b. a deficit in the U.S. capital account
c. a surplus in the U.S. current account
d. a surplus in the U.S. capital account
e. a surplus in the total balance of payments
QUESTION 4If consumers decide to increase their rate of saving, the
a. supply of loanable funds will decrease
b. supply of loanable funds will increase
c. demand for loanable funds will decrease
d. demand for loanable funds will increase
e. interest rate will increase
QUESTION 5Foreign investors may wish to purchase U.S. assets for all of the following reasons except one. Which is the exception?
a. The rate of return on assets is higher in the United States than in other countries.
b. They may wish to diversify their portfolios.
c. The United States may be regarded as a relatively safer place in which to invest.
d. Governments of most other industrialized countries actively discourage foreign investment.
e. With their increased foreign debt burdens, investment in developing countries has become less attractive.
QUESTION 6The supply of loanable funds comes, in part, from
a. consumer saving
b. business investment
c. the federal government
d. current consumption
e. future consumption
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