[Solved] When a Foreign Investor Buys a Bond Issued in Canada

An increase in capital outflows from Canada will A)decrease the balance on the financial account. B)increase the balance on the financial account. C)decrease the balance on the capital account. D)increase the balance on the current account. E)increase the balance on the capital account.

When net capital flows are positive, A)capital inflows are greater than capital outflows. B)net foreign investment is negative. C)capital outflows are greater than capital inflows. D)financial flows must be positive. E)A and B are both correct.

An increase in Canadian net foreign direct investment would occur if A)Canadian citizens have increased the value of foreign stocks and bonds they own. B)Canadian citizens have increased their building or purchasing of facilities in foreign countries. C)net foreign investment increases. D)net capital flows decrease. E)Canadians import more from other countries.

Which of the following is an example of foreign direct investment in China? A)Canadian entrepreneur Kevin O'Leary buys stock in the Chinese auto company, Cherry Automobile Company. B)Chinese Shenzen Airlines company buys a small Canadian airline company, Porter. C)The Canadian company George Weston Ltd buys a warehouse in Shanghai. D)The Bank of China purchases Canadian government bonds. E)A Canadian foreign exchange speculator buys $200,000 worth of the Chinese currency, the yuan.

Net foreign investment is equal to A)capital inflows minus capital outflows. B)foreign direct investment. C)the balance of trade. D)net foreign portfolio investment plus net foreign direct investment. E)the current account balance.

If foreign holdings of Canadian dollars increase, holding all else constant, A)the balance on the Canadian financial account will increase. B)the balance on the Canadian current account will increase. C)the balance on the Canadian capital account will increase. D)the Canadian balance of trade will increase. E)the value of the Canadian dollar will decrease.

If the balance on the current account is $346 billion and the balance on the financial account is -$204 billion, what is the balance on the capital account, assuming no statistical discrepancy? A)$550 billion B)$142 billion C)$0 D)-$142 billion E)-$204 billion

The capital account records A)transactions that affect net capital flows in the economy. B)relatively minor transactions, such as migrants' transfers, and sales and purchases of nonproduced, nonfinancial assets. C)transactions that affect the balance of trade or the balance of services. D)statistical discrepancy between the current account and the financial account. E)transactions between national governments located in each country's capital.

Which of the following would result in a trade surplus for Canada? A)Exports of goods = $450 billion Imports of goods = $400 billion Exports of services = $200 billion Imports of services = $250 billion B)Exports of goods = $450 billion Imports of goods = $450 billion Exports of services = $200 billion Imports of services = $250 billion C)Exports of goods = $450 billion Imports of goods = $460 billion Exports of services = $200 billion Imports of services = $100 billion D)Exports of goods = $450 billion Imports of goods = $490 billion Exports of services = $200 billion

Which of the following would increase the balance on the current account? A)an increase in foreign direct investment B)an increase in the amount of aid money the government sends abroad C)an increase in imports D)an increase in the balance of trade E)an increase in the stock of Canadian patents