Show how each of the following would affect the U.S. BOP. Include a description of the debit and credit items, and in each case say which specific account is affected (eg, CA, imports of goods and services, IM; FA, exports of financial assets, EXA; and so on).Suppose an American, David, is visiting Milan on business selling messenger bags to merchants. He spends a total of $800 (6500) for his hotel. David pays for his hotel using his Mastercard (held in the United States). The Milanese hotel now has a claim against Mastercard, so there is an increase in home assets owned by foreigners.In Milan, David meets with an Italian business associate, Francesco. Francesco plans to purchase a dozen of David's messenger bags (worth $120 each) for a bicycle messenger service he owns. He pays David the $1,440 using a checking account with Banca Intesa (an Italian bank).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. a. A California computer manufacturer purchases a $50 hard disk from a Malaysian company,paying the funds from a bank account in Malaysia.DescriptionHard disk imported fromMalaysiaDecrease in Malaysian depositsowned by U.S. firmBOP AccountCA (↓)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 inMalaysia decreases the foreign asset held by American is recorded in the FA as a credit entry.

Balance of payments (BOP) is a record of all transactions made between a country and the rest of the…

Answered: Show how each of the following would…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Show how each of the following would affect the U.S. BOP. Include a description of the debit and credit items, and in each case say which specific account is affected (eg, CA, imports of goods and services, IM; FA, exports of financial assets, EXA; and so on).

Suppose an American, David, is visiting Milan on business selling messenger bags to merchants. He spends a total of $800 (6500) for his hotel. David pays for his hotel using his Mastercard (held in the United States). The Milanese hotel now has a claim against Mastercard, so there is an increase in home assets owned by foreigners.
In Milan, David meets with an Italian business associate, Francesco. Francesco plans to purchase a dozen of David's messenger bags (worth $120 each) for a bicycle messenger service he owns. He pays David the $1,440 using a checking account with Banca Intesa (an Italian bank).

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.

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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