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An American Farm Equipment Dealer Sells Dollars to Obtain Euros

Question 152

Multiple Choice

An American farm equipment dealer sells dollars to obtain euros. It then uses the euros to buy farm equipment from a German company. This exchange


A) increases U.S. net capital outflow because Germans obtain U.S. assets.
B) decreases U.S. net capital outflow because Germans obtain U.S. assets.
C) increases U.S. net capital outflow because the U.S. buys capital goods.
D) decreases U.S. net capital outflow because the U.S. buys capital goods.

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