How will the following transactions affect the U.S. balance-of-payments? For each transaction in the following table, indicate in which U.S. account it appears as a credit and in which account it appears as a debit. Account with Credit Account with Debit Transaction A Saudi Arabian oil company purchases $1 million worth of U.S. government bonds from a U.S. bank, paying from its account held with the bank. A foreign owner of Microsoft (U.S. company) shares receives $8,000 in dividend payments, which are paid into a New York bank. A U.S. computer manufacturer purchases hard drives from a Korean company, paying the funds from its bank account in Korea. Capital Current Financial

How will the following transactions affect the U.S. balance-of-payments? For each transaction in the following table, indicate in which U.S. account it appears as a credit and in which account it appears as a debit. Account with Credit Account with Debit Transaction A Saudi Arabian oil company purchases $1 million worth of U.S. government bonds from a U.S. bank, paying from its account held with the bank. A foreign owner of Microsoft (U.S. company) shares receives $8,000 in dividend payments, which are paid into a New York bank. A U.S. computer manufacturer purchases hard drives from a Korean company, paying the funds from its bank account in Korea. Capital Current Financial

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter18: International Finance

Section: Chapter Questions

Problem 1.2P

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Similar questions

Why would a nation dollarizeâ€”that is, adopt another countrys currency instead of having its own?
This chapter has explained that one of the most economically destructive effects of exchange rate fluctuations can happen through the banking system, if banks borrow from abroad to lend domestically. Why is this less likely to be a problem for the U.S. banking system?
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1. The double-entry principle in the balance-of-payments How will the following transactions affect the U.S. balance-of-payments? For each transaction in the following table, indicate in which U.S. account it appears as a credit and in which account it appears as a debit. Transaction Miguel, a U.S. resident, buys an HDTV set for $2,500 and sends it to Mexico as a gift to his parents. Brandon, a U.S. resident, pays $5,000 from his checking account held in the United States to buy shares of stock issued by a German company. Xavier, a U.S. resident, receives ¥500,000 in dividend payments on shares that he holds in a Japanese company, which are deposited in his account in a Japanese bank. Account with Credit Account with Debit Current Current Capital Current Capital Financial Financial
6. The double-entry principle in the balance-of-payments How will the following transactions affect the U.S. balance-of-payments? For each transaction in the following table, indicate in which U.S. account it appears as a credit and in which account it appears as a debit. Transaction Account with Credit Account with Debit Miguel, a U.S. resident, buys an HDTV set for $2,500 and sends it to Mexico as a gift to his parents. Bill, a U.S. resident, pays $5,000 from his checking account held in the United States to buy shares of stock issued by a German company. The United States forgives $100 million of debt owed by the government of Mexico.
2. When individuals and entities carry out activities that affect their home country and an overseas country these transactions affect particular accounts domestically and overseas. find from the following given situation and indicate what the effects on the both the domestic and overseas countries and their balance of payments :(a) An Australian manufacturer borrowed $800,000 from an Australian bank to build a manufacturing plant in Croatia.(b)An Australian company paid $55,000 dividends to a UK Investor.(c) An Australian company purchased a trademark paying $80,000 to the US Company. question is complete.
1. The principal function of the foreign exchange market is the transfer of funds, thus purchasing power, from one nation and currency to another. 2. If it takes 116.57 yen to buy one dollar, it takes $.0085785 to buy one yen. 3. Purchasing-power parity theory postulates that the change in the exchange rate between two currencies is proportional to the change in the ratio in the two countries' general price levels. 4. The price-specie-flow adjustment mechanism operates by the deficit nation losing gold and experiencing a reduction in its money supply. 5. Monetary policy is very effective under a fixed exchange rate policy. True or Falae
2. Classify each of the following as debits or credits in the U.S. balance of payments. Americans buy chocolate from the Swiss. U.S. gives foreign aid to Bosnia. British investors purchase U.S. government bonds American tourists travel to Australia Volkswagen earns profits in the United States from its new cars Toyota builds a new plant in Ohio Capital Records sells rock and roll music in Sweden
Show how each of the following would affect the U.S. balance of payments. Include a description of the debit and credit items, and in each case identify which specific account is affected (e.g., imports of goods and services, IM; exports of assets, EXA; and so on. b. The central bank of China purchases $1 million of export earnings from a firm that has sold $1 million of toys to the United States, and the central bank holds these dollars as reserves. c) A U.S. book publisher sells $20,000 of books to a Chinese firm. the firm pays for the books by using its Chinese based credit card company. d) Vlad, a Russian citizen, working in New York, earned $6,000 last year working at a factory owned by a US company. Please draw a table like the one in the image (including the arrows indicate the increase or decrease) and explain like the sample in the image (if possible, can you elaborate a bit more because i want to undersand). Thank you in advanced.
For each of the following, what is the effect on the supply of foreign currency. The demand for foreign currency, and the dollar price of foreign currency? Does the dollar rise or fall? A recession in the U.S. lowering U.S. incomeAn economic boom increases income in ChinaU.S. interest rates decreaseInterest rates decrease in all major countriesInterest rates rise in Europe and Asia, but not in the U.S.