Macroeconomics + Economy 2009 Update 18th Edition by Campbell McConnell, Sean Masaki Flynn,Stanley Brue

Exercise 4

Explain how a U.S. automobile importer might finance a shipment of Toyotas from Japan. Trace the steps as to how a U.S. export of machinery to Italy might be financed. Explain: "U.S. exports earn supplies of foreign currencies that Americans can use to finance imports."