What are the differences between merchandise and service imports and exports? Provide examples to illustrate your answer.
Answer:
a. Merchandise exports are tangible products—goods—sent out of a country. Merchandise imports are goods brought into a country. When a Chinese contractor sends toy action figures from China to Hasbro in the United States, the contractor exports and Hasbro imports.
b. Service exports and imports generate non product international earnings. The company or individual receiving payment is making a service export. The company or individual paying is making a service import. When an American tourist stays at a hotel in London, the hotel stay is the service export.