Oceania buys $40 of wine from Escudia and Escudia buys $100 of wool from Oceania. Supposing this is the only trade that these countries do. What are the net exports of Oceania and Escudia in that order?

Question

Quizplus · Accepted Answer

Net exports for a country are calculated as the value of its exports minus the value of its imports.

For Oceania:

- Exports = $40 (from selling wine to Escudia) 
- Imports = $100 (from buying wool from Escudia)

Net exports = Exports - Imports = $40 - $100 = -$60

So, the net exports for Oceania are -$60.

For Escudia:

- Exports = $100 (from selling wool to Oceania) 
- Imports = $40 (from buying wine from Oceania)

Net exports = Exports - Imports = $100 - $40 = $60

So, the net exports for Escudia are $60.

Therefore, the correct choice is C.

Oceania Buys $40 of Wine from Escudia and Escudia Buys