Question

A company in panama pays for a u.s. architect to design a factory building. by itself this transaction

a. increases u.s. imports and so decreases the u.s. trade balance.
b. increases u.s. exports and so decreases the u.s. trade balance.
c. increases u.s. exports and so increases the u.s. trade balance.
d. increases u.s. imports and so increases the u.s. trade balance.

Answer 1

If the company in panama pays for the u.s architect to design their factory building then the transaction would mean that it will increase u.s exports, if exports increase then it will also increase the u.s trade balance. The transaction allows the increase for u.s exports because they made a transaction to a u.s architect, allowing or creating a wide connection to the u.s, having an increase u.s exports that could cause an increase trade balance.