For each of the following transactions, determine which U.S. balance of payments account is credited and which is debited and by how much. Assume payments for all transactions are deposited into a U.S. dollar-denominated bank account.
For each of the following transactions, determine which U.S. balance of payments account is credited and which is debited and by how much. Assume payments for all transactions are deposited into a U.S. dollar-denominated bank account.
Chapter29: International Finance
Section: Chapter Questions
Problem 1P
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Calculate e) and f)
Thank you.
Transcribed Image Text:For each of the following transactions, determine which U.S. balance of payments account is credited and which is debited and by how
much. Assume payments for all transactions are deposited into a U.S. dollar-denominated bank account.
Instructions: Enter your answer as a whole number.
a. The United States imports $10 million worth of furniture from Sweden.
A credit is made to the financial account v for $
10 million.
A debit is made to the current account
for $
10 million.
b. U.S. investors purchase $5 million in stock from companies located in Southeast Asian countries.
A credit is made to the financial account v for $
5 million.
A debit is made to the financial account v for $
5 million.
c. The United States exports $25 million in wheat to Mexico.
A credit is made to the current account
v for $
25 million.
A debit is made to the financial account v for $
25 million.
d. Chinese investors purchase $2 miltion in U.S. government bonds.
A credit is made to the financial account
for $
2 million.
A debit is made to the financial account
for $
2 million.
Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.
e. What is the net balance of each account?
Current account: $
million
Financial account: $|
1million
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Transcribed Image Text:d. Chinese investors purchase $2 million in U.S. government bonds.
ces
A credit is made to the financial account v for $
2 million.
A debit is made to the financial account v for $
2 million.
Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.
e. What is the net balance of each account?
Current account: $
TEmillion
Financial account: $
million
Capital account: $
million
f. What is the sum of all accounts (current, financial, and capital)?
$4
million
...
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Graw
Hill
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