Suppose that more Chinese decide to vacation in the U.S.and that the Chinese purchase more U.S.Treasury bonds.Ignoring how payments are made for these purchases,

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The first action (more Chinese vacationing in the U.S.) by itself raises U.S. net exports because it increases the demand for U.S. goods and services by foreigners. The second action (Chinese purchasing more U.S. Treasury bonds) by itself lowers U.S. net capital outflow because it means that more foreign capital is flowing into the U.S. rather than out of the U.S. When combined, the two actions could have a mixed effect on the overall balance of payments, depending on the relative magnitudes of the changes in net exports and net capital outflow.

Suppose That More Chinese Decide to Vacation in the U