If a nation is a net creditor internationally, it means that

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BlackTom AI · Accepted Answer

To tackle this question, I will evaluate what it means for a nation to be a net creditor in the international arena.
Option 1: 'residents of the nation have more foreign liabilities than foreign assets.' If a country’s residents owe more to foreign lenders than they own in foreign assets, the country would be a net debtor, not a net creditor. This option describes the opposite situation.
Option 2: 'residents of the nation have more foreign assets than foreign liabilities.' This is the standard definition of a net creditor position: the stock of foreign assets owned by residents exceeds the stock of foreign liabilities owed to foreigners. In other words, the country would be owed more by the rest of the world than it owes to it.
Option 3: 'the nation's government has extended credit to other nations' governments.' While this could contribute to a net creditor position if it reflects a broader excess of financial claims, it is not the precise definition. Net creditor status depends on the overall balance of all residents' foreign assets versus liabilities, not only government lending activity.
Option 4: 'the nation is running low on international assets.' This phrasing implies scarcity of assets, which would be inconsistent with being a net creditor. A net creditor holds relatively larger foreign assets, not fewer. Therefore this interpretation contradicts the defining concept.
In summary, the key idea is the relative magnitude of foreign assets versus foreign liabilities held by residents. The only option that aligns with the standard definition is the one stating that foreign assets exceed foreign liabilities. This makes option 2 the correct characterization of a net creditor status among the provided choices.

01:220:300:01 INTERNATIONAL ECON Qz06: International macroeconomics and foreign exchange

If a nation is a net creditor internationally, it means that

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