A U.S.firm buys wool from Australia with U.S.currency.The Australia firm then uses this money to buy electric shears from a U.S.firm.Which of the following increases?

Question

Quizplus · Accepted Answer

The transaction involves an exchange of goods and currency, but it does not affect Australia's net exports or net capital outflow, as the money is used to purchase goods from the U.S., balancing the transaction.

A USFirm Buys Wool from Australia with U