If a Canadian corporation sells a product to the United States and uses the proceeds to purchase a product manufactured in United States, then Canadian net exports _____, and net capital outflows _____.

Question

Quizplus · Accepted Answer

The sale of a product to the United States increases Canadian exports, but the purchase of a product from the United States increases Canadian imports by the same amount, leaving net exports unchanged. Similarly, the proceeds used to purchase the U.S. product offset the capital outflow, leaving net capital outflows unchanged.

If a Canadian Corporation Sells a Product to the United