A British grocery chain uses previously obtained U.S. dollars to purchase apples from the United States. This transaction
A)increases British net capital outflow, and increases U.S. net exports.
B)increases British net capital outflow, and decreases U.S. net exports.
C)decreases British net capital outflow, and increases U.S. net exports.
D)decreases British net capital outflow, and decreases U.S. net exports.

Question

Quizplus · Accepted Answer

The transaction decreases British net capital outflow because the British grocery chain is using its existing U.S. dollars, not acquiring new foreign assets. It increases U.S. net exports because the U.S. is exporting apples to Britain.

A British Grocery Chain Uses Previously Obtained U