Question

A firm in China sells toys to a U.S. department store chain. Other things the same, these sales:a. decrease U.S. net exports and increase Chinese net exports. b. increase U.S. and Chinese net exports. c. decrease U.S. and Chinese net exports. d. increase U.S. net exports and decrease Chinese net exports.

Answer 1

Answer: decrease U.S. net exports and increase Chinese net exports

Explanation: All things the same, the Chinese is exporting while the American store is importing. As the Chinese is exporting, the net export (the difference between a nation's exports and imports) in China increases and as the American is importing, the net export in America is decreasing.