Suppose that more British decide to vacation in the U.S.and that the British purchase more U.S.Treasury bonds.Ignoring how payments are made for these purchases,
A)the first action by itself raises U.S.net exports,the second action by itself raises U.S.net capital outflow.
B)the first action by itself raises U.S.net exports,the second action by itself lowers U.S.net capital outflow.
C)the first action by itself lowers U.S.net exports,the second action by itself raises U.S.net capital outflow.
D)the first action by itself lowers U.S.net exports,the second action by itself lowers U.S.net capital outflow.

Question

Quizplus · Accepted Answer

When more British vacation in the U.S., it increases U.S. exports of services, raising U.S. net exports. When the British purchase more U.S. Treasury bonds, it represents a capital inflow to the U.S., which lowers U.S. net capital outflow.

Suppose That More British Decide to Vacation in the U