Question

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

a. An American art professor spends the summer touring museums in Europe.
b. Students in Paris flock to see the latest movie from Hollywood.
c. Your uncle buys a new Volvo.
d. The student bookstore at Oxford University sells a pair of Levi's 501 jeans.
e. A Canadian citizen shops at a store in northern Vermont to avoid Canadian sales taxes.

Answer 1

The transactions have varied impacts on U.S. exports, imports, and net exports. For example, buying a new Volvo increases imports, while selling Levi's jeans at a student bookstore increases exports. Other transactions, like a tourist visiting museums or students watching movies, do not directly impact exports or imports.

Step-by-step explanation:

Let's analyze how each transaction would affect U.S. exports, imports, and net exports:

1. a. An American art professor spends the summer touring museums in Europe: This transaction does not directly affect U.S. exports, imports, or net exports since it involves a service (tourism) rather than goods. However, it may indirectly impact tourism-related services flows.
2. b. Students in Paris flock to see the latest movie from Hollywood: This transaction does not directly affect U.S. exports, imports, or net exports as it involves a service (movie) rather than goods.
3. c. Your uncle buys a new Volvo: This transaction increases U.S. imports since a Volvo is a foreign-made product. It does not directly impact U.S. exports or net exports.
4. d. The student bookstore at Oxford University sells a pair of Levi's 501 jeans: This transaction increases U.S. exports since the jeans are made in the U.S. It does not directly impact U.S. imports or net exports.
5. e. A Canadian citizen shops at a store in northern Vermont to avoid Canadian sales taxes: This transaction increases U.S. exports since the Canadian citizen is purchasing goods in the U.S. However, it does not directly affect U.S. imports or net exports.