Question

Indicate how each of the following transactions affects U.S. exports, imports, and net exports.

a. A British scholar spends a year at Harvard University as a visiting scholar.
b. Your parents go on a trip to Japan in late March for the Cherry Blossom season.
c. A Canadian buys a new Ford. Your aunt buys a novel by a British author from a local bookstore.
d. A European family goes to Disney World in Florida for vacation.

Answer 1

a. A British scholar spends a year at Harvard University as a visiting scholar.

• Foreigners that only spend money in the US increase US exports, increasing net exports also

b. Your parents go on a trip to Japan in late March for the Cherry Blossom season.

• Americans spending money on other countries increase US imports, decreasing net exports also

c. A Canadian buys a new Ford. Your aunt buys a novel by a British author from a local bookstore.

• Assuming that the Ford car was built in the US, exports will increase and so will net exports. Buying imported goods increase imports and decrease net exports

d. A European family goes to Disney World in Florida for vacation.

• Foreigners that only spend money in the US increase US exports, increasing net exports also