If Walmart Buys $50 Million Worth of Consumer Goods from China

question 136

True/False

If Walmart buys $50 million worth of consumer goods from China and sells them in the U.S., and China uses the $50 million to purchase U.S. bonds, U.S. net exports and U.S. net capital outflow both fall.

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Definitions:

U.S. Demand

The total desire or willingness to purchase goods and services in the United States, measured at a given price level and in a given time period.

Foreign Exchange

Foreign Exchange involves the trading of one currency for another, often conducted in the global foreign exchange market.

Demand Curve

A visual chart that illustrates the connection between a product's price and the amount of it consumers want to buy.

Currency Value

The worth of one country's currency in terms of another currency or standard measure.