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. (c) An Italian tourist charges $400 to his MasterCard (issued by an Italian bank) for a hotel room in New York City. (d) A Chinese catering company purchases $30,000 in helium tanks from a U.S. welding firm. The Chinese catering company uses deposits from a bank in China. (f) The United States donates $8 million in medical and food supplies to Lebanon following a month-long war. Please draw a table like the sample image (including arrows which indicate the increase or decrease) and explain a bit under the table (if possible, please elaborate a bit more because i want to understand). Thank you so much.
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. (c) An Italian tourist charges $400 to his MasterCard (issued by an Italian bank) for a hotel room in New York City. (d) A Chinese catering company purchases $30,000 in helium tanks from a U.S. welding firm. The Chinese catering company uses deposits from a bank in China. (f) The United States donates $8 million in medical and food supplies to Lebanon following a month-long war. Please draw a table like the sample image (including arrows which indicate the increase or decrease) and explain a bit under the table (if possible, please elaborate a bit more because i want to understand). Thank you so much.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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.
(c) An Italian tourist charges $400 to his MasterCard (issued by an Italian bank) for a hotel room in New York City.
(d) A Chinese catering company purchases $30,000 in helium tanks from a U.S. welding firm. The Chinese catering company uses deposits from a bank in China.
(f) The United States donates $8 million in medical and food supplies to Lebanon following a month-long war.
Please draw a table like the sample image (including arrows which indicate the increase or decrease) and explain a bit under the table (if possible, please elaborate a bit more because i want to understand). Thank you so much.
Transcribed Image Text:a. A California computer manufacturer purchases a $50 hard disk from a Malaysian company,
paying the funds from a bank account in Malaysia.
Description
Hard disk imported from
Malaysia
Decrease in Malaysian deposits
owned by U.S. firm
BOP Account
CA (↓)
FA (1)
Account (detail) Credit/Debit
-IM (↑), TB (↓) -$50
-IMFA (↓)
+$50
***The purchasing of disk is a debt entry in CA due to import. The reduction in deposits held in
Malaysia decreases the foreign asset held by American is recorded in the FA as a credit entry.
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