If a UScompany Buys an Electrical Generator Made in Japan by a by a Japanese

question 56

Multiple Choice

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.

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Definitions:

Private Good

A type of good that is characterized by excludability and rivalry, meaning it can be consumed by only one person at a time.

Excludable

A characteristic of a good or service that allows owners or producers to prevent others from using it without paying for it.

Rival

An entity engaged in competition for the same objective or for superiority in the same field.

Public Good

Goods that are non-excludable and non-rivalrous, meaning that individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.