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Net Exports Equal Net Foreign Investment definitions

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  • Net Exports
    The value difference between goods and services sold abroad and those purchased from other countries, reflecting a nation's trade balance.
  • Net Foreign Investment
    The difference between domestic ownership of foreign assets and foreign ownership of domestic assets, balancing trade flows.
  • Foreign Direct Investment
    Physical capital acquisition, such as factories or land, by a domestic entity in another country or vice versa.
  • Foreign Portfolio Investment
    Ownership of financial assets like stocks or bonds in another country, without direct control over operations.
  • Physical Capital
    Tangible assets such as buildings or factories used in production, often involved in cross-border investments.
  • Financial Asset
    Non-physical claims like stocks or bonds representing ownership or creditor relationships, traded internationally.
  • Trade Balance
    The net result of exports minus imports, indicating whether a country is a net seller or buyer in global markets.
  • Import
    A good or service purchased from abroad, increasing domestic consumption but reducing net exports.
  • Export
    A good or service sold to a foreign buyer, increasing domestic production and net exports.
  • Asset Sale
    Transfer of ownership of items like land, factories, or securities to foreign entities to finance trade deficits.
  • Borrowing
    Obtaining funds from foreign sources to cover the gap when imports exceed exports, impacting national financial accounts.
  • Foreign Asset
    Any resource or claim held by domestic residents in another country, including currency, bonds, or property.
  • Domestic Asset
    Any resource or claim within a country owned by residents or foreigners, such as currency, bonds, or real estate.
  • Currency Exchange
    The process of acquiring foreign money, often resulting from international trade or investment transactions.
  • Portfolio
    A collection of financial investments, which may include foreign securities, reflecting cross-border capital flows.