Question

How would the following transactions affect U.S. exports, imports, and net exports?

Your uncle buys a new Volvo.

Answer 1

The transaction of your uncle buying a new Volvo would affect U.S. imports, but not directly affect U.S. exports or net exports.

Step-by-step explanation:

The transaction of your uncle buying a new Volvo would affect U.S. imports, but not directly affect U.S. exports or net exports. When your uncle buys a new Volvo, it is an import because the car is produced outside the U.S. and is being brought into the country. This transaction increases the total value of imports, but it does not directly impact U.S. exports or net exports.