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Net Exports Equal Net Foreign Investment definitions

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  • Net Exports
    Reflects the difference between a country's exports and imports, indicating whether it sells more goods abroad than it buys.
  • Net Foreign Investment
    Measures the difference between foreign assets acquired by domestic citizens and domestic assets acquired by foreigners.
  • Trade Balance
    Shows whether a country exports more than it imports or vice versa, impacting its economic relationships.
  • Foreign Direct Investment
    Involves ownership of physical capital, such as factories or land, by a domestic entity in a foreign country or vice versa.
  • Foreign Portfolio Investment
    Consists of financial assets like stocks or bonds purchased by domestic citizens in foreign countries or by foreigners domestically.
  • Physical Capital
    Includes tangible assets such as buildings or factories used in production, often involved in direct investment.
  • Financial Asset
    Represents claims to future income, such as stocks or bonds, and is central to portfolio investment.
  • Export
    A good or service sold by domestic producers to buyers in other countries, increasing net exports.
  • Import
    A good or service purchased from foreign producers, decreasing net exports.
  • Capital Flow
    Movement of money and assets across borders, balancing trade differences through investment.
  • Asset
    Anything of value owned, including currency, land, factories, stocks, or bonds, exchanged in international transactions.
  • Bond
    A financial instrument representing a loan, often purchased as part of foreign portfolio investment.
  • Currency
    Medium of exchange, such as yen or dollars, acquired in international trade and investment.
  • Market Equilibrium
    A state where net exports and net foreign investment are balanced, ensuring stable international economic relations.
  • International Economics
    Field studying the flow of goods, services, and capital between countries, crucial for understanding trade and investment.