Explain how net exports and net capital flows are related. What international and domestic factors influence net exports and net capital flows? Elaborate.What is the difference between direct investment and portfolio investment? How do the two financial transactions affect U.S. net capital flow?Exchange Rates-What is an exchange rate? What are the factors that determine the exchange rates? Explain. What are the relationships between international trade and exchange rates?How do exchange rate devaluations and revaluations affect exports and imports of goods and services?