A Guatemalan company exchanges quetzal (Guatemalan currency)for dollars and then uses the dollars to purchase construction equipment from a U.S.company.These transactions
A)increase Guatemalan net capital outflow,and increases U.S.net exports.
B)increase Guatemalan capital outflow,and decreases U.S.net exports.
C)decrease Guatemalan net capital outflow,and increases U.S.net exports.
D)decrease Guatemalan net capital outflow,and decreases U.S.net exports.

Question

Quizplus · Accepted Answer

The Guatemalan company is using dollars to purchase U.S. goods, which increases U.S. net exports. Since the transaction involves purchasing foreign goods, it decreases Guatemalan net capital outflow.

A Guatemalan Company Exchanges Quetzal (Guatemalan Currency)for Dollars and Then