The purchase of a foreign asset by a U.S. resident is a A) ...

[mmm]

The purchase of a foreign asset by a U.S. resident is a
 
  A) surplus item on the financial account. B) deficit item on the current account.
  C) deficit item on the financial account. D) surplus item on the current account.

Question 2

Purchasing power parity can be used as
 
  A) a long-run gauge, but in the short run large deviations in currency values can exist.
  B) a short-term gauge, but in the long run large deviations in currency values can exist.
  C) an indicator of how interest rates will change in the short run.
  D) an indicator of how interest rates will change in the long run.
  E) a short-term and long-term gauge of relative currency values.

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Answer to Question 1

C

Answer to Question 2

A

[mmm]

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[TheDev123]

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