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Jose, Who Lives in Texas, Buys Bonbons Made in France

Question 41

Multiple Choice

Jose, who lives in Texas, buys bonbons made in France for $25. At the same time, the French chocolatier buys stock in IBM for $25. Which of the following statements describes the effect these transactions have on France's balance of trade and payments?


A) Net exports and net capital outflow are both zero.
B) Net exports and net capital outflow both equal $25.
C) Net exports are zero and net capital outflow equals $25.
D) Net exports equal $25 and net capital outflow is zero.

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