Answer:
(B). U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected.
Explanation:
Gross Domestic Product (GDP) of a country measures the total monetary value of all the goods and services it produces.
<em>GDP = Consumption + Investment + Government spending + (Export - Import)</em>
It takes into account consumption by citizens, spending by government, investment and net exports (which is the difference between exports and imports).
When a U.S. citizen buys a dress produced in Nepal by a Nepalese firm, the value of the dress reflects in U.S. 'consumption' and increases it.
U.S. Net export (Export - Import) also drops as import increases, assuming export remains the same.
However, the GDP of U.S. remains the same because the value of the dress, which is already recorded as a part of 'consumption', is cancelled out when 'imports' are deducted.
