Question 1 of 2

Work It Out

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You must read each slide, and complete any questions on the slide, in sequence.

Consider the headlines: “Money is pouring into the U.S. faster than ever” vs. “Record U.S. trade deficit.” How can both be true simultaneously?

Where is the money “pouring” from?

Foreigners outside the United States who have dollars to invest.

Americans inside the United States who have dollars to invest.

Where do foreigners get the dollars that they’re investing in the U.S.?

They sell goods and services to Americans.

They sell American assets.

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Consider the headlines: “Money is fleeing the U.S. faster than ever” vs. “Record U.S. trade surplus.” How can both be true simultaneously?

How is the money “fleeing” out of the U.S.?

Americans with foreign currency investing abroad.

Foreigner with extra currency to invest in American firms.

How do Americans get the money they invest abroad?

Americans sell foreign assets.

Americans sell goods and services to the citizens of foreign countries.