Which of the following will be recorded as a credit entry in the U.S. balance of trade in merchandise account?
a. A U.S. car manufacturer selling a car to a resident of India.
b. A French wine manufacturer selling wines to a distributor in Seattle.
c. A U.S. investor investing in Japanese stocks.
d. A U.S. steel manufacturer importing iron ore from Zambia.
e. A U.S. resident buying diamonds from a diamond manufacturer in Kenya.
Question 2
Suppose a U.S. resident buys a car from a car maker in Japan. This transaction will:
a. have a negative effect on Japan's balance of trade in merchandise.
b. have a negative effect on the U.S. balance of trade in merchandise.
c. have a positive effect on the U.S. balance of trade in merchandise.
d. bring money into the United States.
e. have no effect on Japan's balance of trade in merchandise.
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