Made In China Talk  

Go Back   Made In China Talk > International Business Talk > Export
Directory Register FAQ Members List Calendar Mark Forums Read 中文




Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. T


Reply
 
Thread Tools Display Modes
  #1  
Old 05-30-2008, 10:09 PM
madeinchinatalk madeinchinatalk is offline
Senior Member
 
Join Date: Nov 2007
Posts: 189
Feedback: (0)
Default Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. T

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.

2.2. Assume that U.S. trade with Japan was in balance prior to the above transactions. The transaction between Sony and Pfizer leads to:



A. A trade surplus in the United States

B. An increase in net exports in the United States

C. A trade deficit in the United States
Reply With Quote




  #2  
Old 05-30-2008, 10:09 PM
Steve Steve is offline
Senior Member
 
Join Date: May 2008
Posts: 1,538
Feedback: (0)
Default Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. T

C. A trade deficit in the United States


As long as the United States is exporting its cash for imported Widgets, we will run a trade deficit.
Reply With Quote
  #3  
Old 05-30-2008, 10:09 PM
India India is offline
Senior Member
 
Join Date: May 2008
Posts: 2,052
Feedback: (0)
Default Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. T

"C" is right one. More import creates trade deficit.
Reply With Quote
  #4  
Old 05-30-2008, 10:09 PM
western western is offline
Senior Member
 
Join Date: May 2008
Posts: 1,357
Feedback: (0)
Default Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. T

C. A trade deficit in the United States

initially the the balance of trade is equal
next, $1 million goes to Japan for the laptops
although $1 million goes to a manufacturing plant in the USA, it is not trade, it is just an investment on capital equipment

there is still a deficit of $1 million
Reply With Quote
  #5  
Old 10-26-2017, 08:18 PM
Desy86 Desy86 is offline
Junior Member
 
Join Date: Oct 2017
Posts: 9
Feedback: (0)
Default

Very good topic and a lot of useful information!
Reply With Quote
Reply



Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


| Business Forum | Toronto Chinese

All times are GMT +9. The time now is 05:37 PM.


All rights reserved. Copyright 2007 Made In China Talk