An Italian company exchanges euros for dollars from U.S.residents and then uses the dollars to buy U.S.products to sell in its stores in Rome.U.S.residents who exchanged their dollars for euros use the euros to buy bonds issued by French corporations.At this point
A)both U.S.net exports and U.S.net capital outflows have risen.
B)both U.S.net exports and U.S.net capital outflow have fallen.
C)U.S.net exports have risen and U.S.net capital outflow have fallen.
D)U.S.net exports have fallen and U.S.net capital outflow have risen.

Question

Quizplus · Accepted Answer

U.S. net exports have risen because the Italian company is buying more U.S. products. U.S. net capital outflow has risen because U.S. residents are buying more French bonds.

An Italian Company Exchanges Euros for Dollars from U