s Back to Assignment Attempts: Keep the Highest: /1 2. Problems and Applications
ID: 1165220 • Letter: S
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s Back to Assignment Attempts: Keep the Highest: /1 2. Problems and Applications Q2 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. Net Capital Outflow Increase Decrease Increase Decrease Net Exports Transaction An American buys a Toyota. An American investor buys a controlling share in a South Korean electronics firm. The Japanese car manufacturer Nissan builds a factory in Ohio. A worker at a Sony plant in Japan buys some Georgia peaches from an American farmer. Grade It Now Save & Continue Continue wthout saving O Type here to searchExplanation / Answer
1. Decrease in Net Exports; Increase in net capital outflow - becasuse the car will have to be imported and the money paid will go to Japan from America.
2. Decrease in Net Exports; Increase in net capital outflow - the purchase of stake will lead to outflow of dollars for the purchased stake.
3. Increase in Net Exports; Decrease in net capital outflow - this is because the Japanese company will be investing money in the US based plant.
4. Increase in Net Exports; Decrease in net capital outflow - This is so because peaches are exported to Japan and the money in turn is received for the peaches by the US farmer.
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