If Ford Sells 200 Explorers for a Total of $400,000

question 193

Multiple Choice

If Ford sells 200 Explorers for a total of $400,000 to Germany, while the United States imports 100 BMWs for a total of $500,000 from Germany,

• A) Germanyʹs GDP decreases.
• B) U.S. net exports is positive.
• C) U.S. GDP decreases because net exports are negative.
• D) U.S. GDP increases because it sells more Explorers.

---

Definitions:

Hedge Risks

Strategies or financial instruments used to offset potential losses or gains that may be incurred by a companion investment.

Significant Liability(ies)

Refers to considerable financial obligations or debts that a company or individual has, which may impact their financial stability or creditworthiness.

Loans And Leases

Financial arrangements where loans involve borrowing money that must be repaid with interest, while leases involve paying for the use of an asset for a specified period.

Deposits

Funds placed into an account at a financial institution for safekeeping and potential interest earnings.