Suppose that country A's citizens, firms, and governments own $750 billion of assets in other countries and that foreign citizens, firms, and governments own $850 billion of assets in country A. This situation indicates that country A has a __________ of __________.

Question

Quizplus · Accepted Answer

The given information suggests that country A's citizens, firms, and governments have invested $750 billion in other countries, while foreign citizens, firms, and governments have invested $850 billion in country A. This implies that country A's net international investment position is negative, i.e., country A owes more to foreign entities ($850 billion) than what foreign entities owe to country A ($750 billion). Therefore, the correct answer is C - net international investment position; minus $100 billion. Option A and B are incorrect because the information given does not directly suggest whether country A has a balance-of-payments surplus or deficit. Option D is incorrect because the net international investment position is negative, not positive.

Suppose That Country A's Citizens, Firms, and Governments Own $750