If the United States sells computers to Russia,and uses the proceeds to buy shares of stock in Russian companies,the U.S.trade balance ________ and the U.S.financial account balance ________.
A)rises; rises
B)rises; falls
C)falls; falls
D)falls; rises

Question

Quizplus · Accepted Answer

The U.S. trade balance rises because it exports goods (computers) to Russia, increasing exports. The financial account balance falls because the U.S. uses the proceeds to buy shares in Russian companies, which is a financial outflow.

If the United States Sells Computers to Russia,and Uses the Proceeds