The purchase of the laptop computers:?

Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. The laptops are produced in Japan.

Sony exchanges the $1 million at Tokyo Bank for 100 million yen. Tokyo Bank lends the $1 million to Honda Motor Company, which uses it to expand its automobile manufacturing facility in Indiana.

A. Decreases U.S. exports by $1 million

B. Increases U.S. net capital outflow by $1 million

C. Increases U.S. imports by $1 million

D. Decreases U.S. imports by $1 million

The purchase of the laptop computers:?windows

I would say D. Reason being. If you are exporting then you are recieving something in return for the money so you then sell those products in your country for that profit. So it cannot go down nor up since the US is receiving something in the first scenario with the laptops. It's purchasing the laptops and then selling them. The second scenario, they aren't recieving anything. Not cars, but Honda Motor Company is builiding ''their'' company while not exaclty producing cars.

Read this link to understand

http://www.econ.canterbury.ac.nz/persona...

The purchase of the laptop computers:?antivirus download

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