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Describe how the following transactions would affect U.S. exports, imports, and net exports: Students in Prague...

Describe how the following transactions would affect U.S. exports, imports, and net exports: Students in Prague flock to see the latest movie from Hollywood. Mrs. Jones in Philadelphia buys a new Volvo. The student bookstore at Oxford University in England sells a copy of a U.S. printed/authored textbook A Canadian citizen shops at a store in northern Vermont to avoid Canadian sales taxes. An American art professor spends the summer touring museums in Europe. Please do not copy one of the answers already posted here on chegg, and please make each answer one paragraph long. thank you and I will rate well!

Solutions

Expert Solution

Net exports = Export - Imports

(1) Students in Prague flock to see the latest movie from Hollywood:

Dutch students travel to US to consume US-made movies. This is an export of services from US perspective, which will increase exports. Imports remaining unchanged, this will increase net exports.

(2) Mrs. Jones in Philadelphia buys a new Volvo:

A US resident purchasing a Swedish made (Volvo) car is an import of a good from US perspective, which will increase imports. Exports remaining unchanged, this will decrease net exports.

(3) Student bookstore at Oxford University in England sells a copy of a U.S. printed/authored textbook:

Sale of US-made book in England is an export of goods from US perspective, which will increase exports. Imports remaining unchanged, this will increase net exports.

(4) Canadian citizen shops at a store in northern Vermont to avoid Canadian sales taxes:

Sale of US-made good to a Canadian is an export of goods from US perspective, which will increase exports. Imports remaining unchanged, this will increase net exports.

(5) An American art professor spends the summer touring museums in Europe:

A US resident purchasing tourism services in Europe is an import of services from US perspective, which will increase imports. Exports remaining unchanged, this will decrease net exports.

Rahul Sunny answered 1 year ago
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