When a national entity invests abroad, economists call it a(n):

Question

Quizplus · Accepted Answer

When a national entity invests abroad, it acquires assets in foreign countries. These assets are counted as external assets for the home country. Therefore, option A is the correct choice. Option B is incorrect as external liabilities are created when foreign entities invest in the home country. Option C is incorrect as trade deficit refers to a situation when a country's imports exceed its exports. Option D is also incorrect as a financial surplus refers to a situation when a country's savings exceed its investments.

When a National Entity Invests Abroad, Economists Call It A(n)