When a U.S. oil company purchases oil from Saudi Arabia and the Saudi Arabian firm uses the proceeds from the sale to buy transportation services from the U.S., U.S. net exports ________ and the capital inflow to the United States ________.

Question

Quizplus · Accepted Answer

The oil purchase by the U.S. company is an import to the U.S. On the other hand, the purchase by the Saudi Arabian firm of U.S. transportation services is an export for the U.S. These cancel out and there is no change in net exports or capital inflows.

When a US Oil Company Purchases Oil from Saudi Arabia and the and the Saudi