Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm?
February 26th, 2009
Posted by: admin
Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. The laptops are produced in Japan.
Sony exchanges the $1 million at Tokyo Bank for 100 million yen. Tokyo Bank lends the $1 million to Honda Motor Company, which uses it to expand its automobile manufacturing facility in Indiana.
13.3. Sony acquires a U.S. asset (that is, dollars) in exchange for the laptops. Sony’s acquisition ____ net capital outflow in the United States.
A. Increases
B. Decreases
C. Does not affect
By: bob