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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
If, due to political turmoil, Russian investors decide to buy more UK assets instead of Russian ones, what is the impact on the UK's net foreign investment?
Multiple choice question for Budget Deficits And The Trade Balance. Select an option, then review the explanation below.
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?