For each of the following, identify in which part ofthe balance-of-payments account the transaction isrecorded (current account, capital account, or netchange in international reserves) and whether it is areceipt or a payment.a. A British subject’s purchase of a share of Johnson &Johnson stockb. An American citizen’s purchase of an airline ticketfrom Air Francec. The Swiss government’s purchase of U.S. Treasury billsd. A Japanese citizen’s purchase of California orangese. $50 million of foreign aid to Hondurasf. A loan from an American bank to Mexicog. An American bank’s borrowing of eurodollars
For each of the following, identify in which part ofthe balance-of-payments account the transaction isrecorded (current account, capital account, or netchange in international reserves) and whether it is areceipt or a payment.a. A British subject’s purchase of a share of Johnson &Johnson stockb. An American citizen’s purchase of an airline ticketfrom Air Francec. The Swiss government’s purchase of U.S. Treasury billsd. A Japanese citizen’s purchase of California orangese. $50 million of foreign aid to Hondurasf. A loan from an American bank to Mexicog. An American bank’s borrowing of eurodollars
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
For each of the following, identify in which part of
the balance-of-payments account the transaction is
recorded (current account, capital account, or net
change in international reserves) and whether it is a
receipt or a payment.
a. A British subject’s purchase of a share of Johnson &
Johnson stock
b. An American citizen’s purchase of an airline ticket
from Air France
c. The Swiss government’s purchase of U.S. Treasury bills
d. A Japanese citizen’s purchase of California oranges
e. $50 million of foreign aid to Honduras
f. A loan from an American bank to Mexico
g. An American bank’s borrowing of eurodollars
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