U. S. exports are $300 billion, U. S. imports are $500 billion. Which of the following are consistent with the level of net exports?

a. The U. S has a trade surplus. The U. S. purchases $800 billion worth of foreign assets and foreign countries purchase $600 billion worth of U. S. assets.

b. The U. S. has a trade surplus. The U. S. purchases $600 billion worth of foreign assets and foreign countries purchase $800 billion worth of U. S. assets.

c. The U. S has a trade deficit. The U. S. purchases $800 billion worth of foreign assets and foreign countries purchase $600 billion worth of U. S. assets.

d. The U. S. has a trade deficit. The U. S. purchases $600 billion worth of

Question

Business

Hadassah Murillo

24 June, 11:37

U. S. exports are $300 billion, U. S. imports are $500 billion. Which of the following are consistent with the level of net exports?

a. The U. S has a trade surplus. The U. S. purchases $800 billion worth of foreign assets and foreign countries purchase $600 billion worth of U. S. assets.

b. The U. S. has a trade surplus. The U. S. purchases $600 billion worth of foreign assets and foreign countries purchase $800 billion worth of U. S. assets.

c. The U. S has a trade deficit. The U. S. purchases $800 billion worth of foreign assets and foreign countries purchase $600 billion worth of U. S. assets.

d. The U. S. has a trade deficit. The U. S. purchases $600 billion worth of

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Answers (1)

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Christopher Garrison · Answer 1

c. The U. S has a trade deficit. The U. S. purchases $800 billion worth of foreign assets and foreign countries purchase $600 billion worth of U. S. assets.

Explanation:

Exports = $300 billion

Imports = $500 billion

Trade surplus / (deficit) = $300 billion - $500 billion

= ($200 billion)

Considering all the options,

Purchases = $800 billion

Sales = $600 billion

Trade surplus / (deficit) = $600 billion - $800 billion

= ($200 billion)

Hence the right answer is c. The U. S has a trade deficit. The U. S. purchases $800 billion worth of foreign assets and foreign countries purchase $600 billion worth of U. S. assets.