A US company imports \$75,000 worth of goods from China. How does this transaction affect US net exports and net foreign investment?

• A. Net exports decrease by \$75,000; net foreign investment remains unchanged.
• B. Net exports increase by \$75,000; net foreign investment increases by \$75,000.
• C. Net exports decrease by \$75,000; net foreign investment decreases by \$75,000.
• D. Net exports remain unchanged; net foreign investment decreases by \$75,000.

Answer: (C)