47. When a country imports more than it exports, it has a: a. trade deficit. b.

Question

47. When a country imports more than it exports, it has a: a. trade deficit. b. trade surplus. c. zero trade balance d. policy which forbids exportation. 48. The stock is an example of Your Uncle Harry gives you stock in Samsung for your birthday. a. foreign direct investment. b. foreign portfolio investment. c. importing. d. exporting. 49. In the market for loanable funds in an open economy, the demand for loanable funds a. can be demanded for domestic investment or international investment. b. is equal to national income. c. is equal to private investment d. is equal to public investment. 50. When interest rates in the U.S. decline, we can expect: a. capital inflows and capital outflows to decrease. b. capital inflows and capital outflows to increase. c. capital inflow to decrease, and capital outflow to increase. d. capital outflow to decrease, and capital inflow to increase.

Explanation / Answer

47) The correct answer is a. Trade deficit

Explanation:-  A trade deficit occurs when a country's imports is more than its exports.

48) The correct answer is b. Foreign portfolio investment

Explanation:- Portfolio investment is represented by a movement of money for the purpose of buying shares in a company formed or functioning in another country.

49) The correct answer is a

Explanation:- The demand for loanable funds comes from two sources i.e. domestic investment and net capital outflow.

50) The correct answer is C

Explanation:- A fall in the domestic interest rate leads to capital outflows, which make the exchange rate depreciate.

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