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If a U.S. company buys an electrical generator made in Japan by a Japanese firm, and the Japanese firm uses the payment to buy stocks issued by a U.S. company then a. U.S. exports and U.S imports increase. b. U.S. exports but not U.S. imports increase. c. U.S. imports but not U.S. exports increase. d. neither U.S. exports nor U.S. imports increase.

Respuesta :

Answer:

The correct answer is option c.

Explanation:

When a US company buys a generator from a Japanese company, this is an import for US and export for Japan. This purchase will cause the US exports to increase.

The japanese company uses this payment to buy stocks in a US company. This purchase is an investment and will not be included in US exports. So US exports will not change.

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