When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1 euro), U.S. net exports increase by $150. These $150 in exports can be accounted for as $150 increase in capital outflow because O if the U.S. firm uses the proceeds to buy a U.S. bond, capital investment in the foreign country has increased O private consumption in the foreign country increases by $150 O if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm Call of the above Onone of the above

When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1 euro), U.S. net exports increase by $150. These $150 in exports can be accounted for as $150 increase in capital outflow because O if the U.S. firm uses the proceeds to buy a U.S. bond, capital investment in the foreign country has increased O private consumption in the foreign country increases by $150 O if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm Call of the above Onone of the above

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter31: Open-Economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 4PA

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