A utilities company in the Netherlands buys wind generators made by a U.S.company.It pays from them with previously obtained dollars.By itself,this exchange
A)increases both U.S.net exports and U.S.net capital outflow.
B)decreases both U.S.net exports and U.S.net capital outflow.
C)increases U.S.net exports and does not affect U.S.net capital outflow.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

This transaction represents an export of wind generators from the U.S. to the Netherlands, which increases U.S. net exports. At the same time, the Dutch utilities company is paying for the wind generators with previously obtained dollars, which represents an outflow of capital from the United States. Therefore, this exchange increases both U.S. net exports and U.S. net capital outflow.

A Utilities Company in the Netherlands Buys Wind Generators Made