Question

When Tesla, a U.S. company, purchases Italian-made Pirelli tires for its automobiles, the purchase is:

A. a U.S. import and an Italian export.
B. neither an export nor an import for either country.
C. a U.S. export and an Italian import.
D. both a U.S. and an Italian import.

Answer 1

The purchase is:

B. neither an export nor an import for either country.

Step-by-step explanation:

In the case provided, with the single purchase the import or export terms cannot yet be considered since for this the product, in this case, the Pirelli tires must leave Italy (export) and enter the United States (import) to be used in the manufacture of Tesla Motors, the purchase as such could be taken as the pact by which Pirelli undertakes to export its tires and Tesla Motors to import them, but the terms are regularly based on the transport of the product or service.

Answer 2

A. a U.S. import and an Italian export.

Step-by-step explanation:

In international trade, country that produces or made goods and sell them to other foriegn country is called the exporter and this process is called exportation. However, country buying that stuff is called an importer and process of buying things from other countries is called importation. Just like in the above case, Italy is selling it's Pirelli tires so italy is exporting and US company tesla is buying that product so US is importing.