A USRetailer Buys Shoes from an Italian Company

Multiple Choice

A U.S.retailer buys shoes from an Italian company.The Italian firm then uses all of the revenues to buy leather from the U.S.These transactions

A) increase both U.S.net exports and U.S.net capital outflow.
B) decrease both U.S.net exports and U.S.net capital outflow.
C) increase U.S.net exports and do not affect U.S.net capital outflow.
D) None of the above is correct.