Question

State whether each of the following events involves a financial flow to the U.S. economy or away from the U.S. economy: a. Export sales to Germany b. Returns paid on past U.S. financial investments in Brazil c. Foreign aid from the U.S. government to Egypt d. Imported oil from the Russian Federation e. Japanese investors buying U.S. real estate

Short answer

a. Financial flow to the U.S. economy. b. Financial flow to the U.S. economy. c. Financial flow away from the U.S. economy. d. Financial flow away from the U.S. economy. e. Financial flow to the U.S. economy.

Step-by-step solution

Event:

Export sales to Germany

Analysis:

When the U.S. exports goods or services to Germany, the American company receives payments from German buyers. This means money flows into the U.S. economy from Germany.

Answer:

Financial flow to the U.S. economy. #b. Returns paid on past U.S. financial investments in Brazil#

Event:

Returns paid on past U.S. financial investments in Brazil.

Analysis:

When the U.S. investors receive returns on their past investments in Brazil, they are earning money from the Brazilian economy. This means money flows into the U.S. economy from Brazil.

Answer:

Financial flow to the U.S. economy. #c. Foreign aid from the U.S. government to Egypt#

Event:

Foreign aid from the U.S. government to Egypt.

Analysis:

When the U.S. government gives foreign aid to Egypt, the money comes from the U.S. budget and is transferred to the Egyptian economy. This means money flows out of the U.S. economy and into the Egyptian economy.

Answer:

Financial flow away from the U.S. economy. #d. Imported oil from the Russian Federation#

Event:

Imported oil from the Russian Federation.

Analysis:

When the U.S. imports oil from Russia, the American companies pay Russian businesses for the oil. This means money flows out of the U.S. economy and into the Russian economy.

Answer:

Financial flow away from the U.S. economy. #e. Japanese investors buying U.S. real estate#

Event:

Japanese investors buying U.S. real estate.

Analysis:

When Japanese investors buy U.S. real estate, they pay American sellers. This means money flows into the U.S. economy from Japan.

Answer:

Financial flow to the U.S. economy.