If the U.S.purchased $100 billion in foreign assets and foreigners purchased $50 billion of U.S.assets,which of the following is true?
A) Net exports equal -$50 billion.
B) Exports total $100 billion.
C) There is a trade deficit.
D) Net exports equal $50 billion.
E) Imports total $50 billion.

Question

Quizplus · Accepted Answer

The net exports equal the difference between exports and imports. In this case, exports are $100 billion and imports are $50 billion, resulting in a net export of $50 billion. Choice A is incorrect as it implies that net exports are negative, which is not the case here. Choice B is incorrect as it only accounts for exports and not imports. Choice C is also incorrect as it implies that net exports are negative. Choice E is incorrect as it only accounts for imports and not exports.

If the USPurchased $100 Billion in Foreign Assets and Foreigners Purchased $50