Concept explainers
If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?
The details in the current account if foreign investors buy more U.S. stocks and bonds are to be determined.
Answer to Problem 1SCQ
Their dividend and interest will be part of imports.
Explanation of Solution
If any country buy the U.S. Bonds and Stocks, that will be a part of the financial account. The dividend from stocks and interest from bonds will be a part of imports and become negative, as imports are negative in current account rather than positive like exports.
Current account: It is one of the component of balance of payments .It consists of imports, exports, net income from abroad and net cash payments
Want to see more full solutions like this?
Chapter 23 Solutions
Principles of Economics 2e
Additional Business Textbook Solutions
Horngren's Accounting (11th Edition)
Managerial Accounting (5th Edition)
Principles of Accounting Volume 2
Principles of Accounting Volume 1
Principles of Management
Managerial Accounting (4th Edition)
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStaxBrief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningEconomics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning