When countries buy from one another what currency do they use? If the US buys goods from Japan do they give them dollars that is equal to the amount of yen it is by the exchange rate, or do they exchange their dollars for yen and then trade? And when Japan buys from the US do the US receive Yen or dollars? Do they go to the foreign exchange market? Also I have a question about this quote. "Each exchange that affects the net capital outflow, also affects net exports in the same amount. For instance, if an economy is running a trade deficit, it must be financing the net purchase of goods and services by selling assets abroad. If it’s running a trade surplus, the excess in foreign currency it receives is being used to buy assets from abroad."
When the US government issues treasury bills, if China or Japan buys it does the US receive that amount in their currency or our own? If there is a trade deficit and we need more foreign currency to buy the products. Why issue treasury bills or sell assets and owe them more later with interest when we can just get the difference and convert our own dollars to their currency and not have to borrow from foreigners?