The financing of U.S. export transactions, ceteris paribus

Question

Quizplus · Accepted Answer

Financing of U.S. export transactions typically involves U.S. banks lending to foreign buyers to purchase U.S. goods. This increases the amount of foreign currency (from the foreign buyers) held by U.S. banks. A and C are incorrect because they are not direct effects of U.S. export financing. B is incorrect because it depends on whether the foreign buyers pay for the exports in their own currency or in U.S. dollars.

The Financing of U.S. Export Transactions, Ceteris Paribus