Question

Suppose that U.S. citizens purchase more cars made in Korea, and Koreans purchase more bonds issued by U.S. corporations. Other things the same, these actions
A. lower U.S. net exports and raise U.S. net capital outflows.
B. raise U.S. net exports and lower U.S. net capital outflows.
C. raise both U.S. net exports and U.S. net capital outflows.
D. lower both U.S. net exports and U.S. net capital outflows.

Answer 1

Answer:

The correct answer is C. raise both U.S. net exports and U.S. net capital outflows

Explanation:

Suppose that U.S. citizens purchase more cars made in Korea, and Koreans purchase more bonds issued by U.S. corporations. Other things the same, these actions raise both U.S. net exports and U.S. net capital outflows