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- Subject
- Budget Deficits And The Trade Balanceeconomics-mcqs › budget-deficits-and-the-trade-balance
- Published
- 2 Jun 2019
- Last updated
- 28 May 2026
Explanation
When foreign investors purchase more UK assets, it means the UK is receiving capital inflows, which reduces the net foreign investment balance (net foreign investment = UK investment abroad minus foreign investment in the UK). Therefore, UK net foreign investment declines.
More Budget Deficits And The Trade Balance MCQs
Practice related questions from the same subject.
- 1.Which economic policy is expected to produce effects contrary to those of an export subsidy?
- 2.Which of these groups would gain no advantage from an EU import quota on Japanese automobiles?
- 3.Which of the following statements regarding a nation's trade policy is accurate?
- 4.If the European Union enforces a quota limiting the import of clothing made in China, thereby reducing the UK's clothing imports, which statement accurately describes the impact on the foreign exchange market for the British pound?
- 5.How would a rise in European demand for Hondas manufactured in the UK affect the value of the British pound?
- 6.What is the effect of a rise in the government budget deficit on real interest rates and investment?
- 7.What is the impact of capital flight on a nation's net exports and its long-term economic growth?
- 8.Which of the following parties would be most negatively impacted by a budget deficit in the UK government?
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