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Wes, Who Lives in Wisconsin, Buys $200 Worth of Stock

Question 49

Multiple Choice

Wes, who lives in Wisconsin, buys $200 worth of stock in Toshiba, a Japanese company. At the same time, Kyohei, who lives in Japan, buys a wheel of cheese from Wisconsin. Which of the following statements describes the effect these transactions have on the U.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 $200.
C) Net exports are zero and net capital outflow equals $200.
D) Net exports equal $200 and net capital outflow is zero.

Correct Answer:

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