Bob's Brewery is located in Canada and starts to export beer to the United States. What are the effects of these sales?

a.U.S. Net Exports decrease, and U.S. Net Capital Outflows increase

b.U.S. Net Exports increase, and U.S. Net Capital Outflows decrease

c.U.S. Net Exports increase, and U.S. Net Capital Outflows increase

d.U.S. Net Exports decrease, and U.S. Net Capital Outflows decrease

Which of the following statements is consistent with positive net exports?

a.foreign assets bought by Canadians are greater than Canadian assets bought by foreigners, and so net capital outflows are negative

b.foreign assets bought by Canadians are greater than Canadian assets bought by foreigners, and so net capital outflows are positive

c.Canadian assets bought by foreigners are greater than foreign assets bought by Canadians, and so net capital outflows are positive

d.Canadian assets bought by foreigners are greater than foreign assets bought by Canadians, and so net capital outflows are negative

If Canadian firms became more optimistic about future demand and want to invest more at each interest rate, which statement would best describe the results?

a.net capital outflows increase, and the real exchange rate falls

b.net capital outflows increase, and the real exchange rate rises

c.net capital outflows decrease, and the real exchange rate rises

d.net capital outflows decrease, and the real exchange rate falls

Suppose Thelma is a Canadian citizen, and she buys bonds issued by a German brewery. What does this purchase represent?

a.Canadian foreign direct investment which reduces Canadian net capital outflows

b.Canadian foreign portfolio investment which increases Canadian net capital outflows

c.Canadian foreign portfolio investment which reduces Canadian net capital outflows

d.Canadian foreign direct investment which increases Canadian net capital outflows