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You Import 10 Handwoven Sisal Handbags from an Artisan in Kenya

Question 83

Multiple Choice

You import 10 handwoven sisal handbags from an artisan in Kenya. The bags cost a total of $500. If the Kenyan artisan opts to buy U.S. bonds worth $500 with the money, then the U.S. current account deficit:


A) remain unchanged.
B) rises by $500, but the U.S. financial account surplus also rises by $500.
C) falls by $500, but the U.S. financial account surplus also falls by $500.
D) rises by $500, but the U.S. financial account surplus falls by $500.

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