Question

Indicate whether each of the following transactions represents an increase in net exports, a decrease in net exports, an increase in net capital outflow, or a decrease in net capital outflow for the United States. Transaction Net Exports Net Capital Outflow Increase Decrease Increase Decrease The Sony pension fund buys a bond from the U.S. Treasury. A South Korean tourist buys some Sunkist oranges from an American farmer. An American buys a Toyota. An American buys a share of Sony stock.

Answer 1

Answer:

A. Decrease net capital outflow

B. Increase in net exports

C. Decrease in net exports.

D. Increase net capital outflow.

Explanation:

A. When the Sony pension fund buys U.S treasury then there is a inflow of capital. Hence, this will decrease the net capital outflow.

B. The Sunkist oranges is purchased by the South Korean tourist from the american farmer will increase the exports of the U.S. Hence, there is an increase in the net exports.

C. When a Toyota is purchased by an American then this will increase the imports of United states and hence, there is a reduction in the net exports.

D. The shares of Sony are purchased by an american, so there is a outflow of capital and this will increase the net capital outflow.